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A few nights ago I discussed the lodging sector for members inside the 12631 Trading Service. It is often an overlooked industry by many traders, for whatever reason. However, the weekly charts of stocks like H HOT MAR WYN have all given similar looks, breaking out on strong buy volume over the past few months, and then consolidating in a very tight manner without much selling recently. What impresses me most about their weekly charts is how clean they are, in that regard.

Today, Marriott looks to be taking on a  leadership role in the group with its outperformance. The weekly chart below indicates that the stock might just be getting started on a secondary breakout higher, if this initial pop holds.

MAR is not HOT, but it sure is pretty.

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We are seeing some of the sharpest claws that the bears have been able to muster thus far in 2012 this morning. The morning gap down has awakened traders who had been fighting to no end to see some type of reversion to mean in recent weeks. Seeing that we have not had a down 1% day this year, now looks to be as good a chance as any for the bears to accomplish that feat. Indeed, breadth is strongly red, and I would be surprised if the dip-buyers were able to pull off another massive intraday reversal.

What is more important to me, as a swing trader, is the larger picture. We are currently about 2.5% off the 1378 highs on the S&P 500. As I have discussed in prior blog posts here and inside 12631, a 3-5% correction can come at any time and still be wholly within the context of a bull trend. In addition, the Russell 2000 small cap-dominated index is at its rising 50 day moving average. The 50 day is a widely-watched reference point and, especially on the first touch in a trending market, is an area where the institutional believers in this rally are likely to put up a strong fight. Whether we close one or two ticks above or below it is not particularly important to me. Instead, I am looking at this general area as the primetime battleground, where the true believers in the rally fight it out with the heathens who have no faith.

Other than that, I am probably going to reevaluate my holdings this morning and look at cutting loose of the laggards. The bears have been wrong enough for long enough, and no team goes undefeated throughout any stock market season (trend). So, I am apt to let them have their fun today. After all, they have waited long enough for today.

http://www.youtube.com/watch?v=swUXCj0MyT8

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I got stopped out of two longs this morning inside 12631, with the market coming under more internal pressure. Despite the Russell 2000 small-cap index heading down to that round 800 number, the S&P 500 is still printing an inside day. My sense is that the market is offering up a “max frustration” or maximum boom-boom scenario to both bulls and bears here. The direction bets via either TNA or TZA might be missing the mark, as I think this is more of a stock picker’s market than anything else.

I still have a bunch of longs that have yet to come under much pressure at all, and some like WFM and RTN that are showing excellent breakout potential. I am trying to stick with the prevailing trend, but the market is putting me to the test here. As always, the first and last lines of defense in my portfolio are position sizing and stop-loss risk management.

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It is worth remembering that the biotechnology stocks started off 2012 with a very powerful move supported by expanding buy volume. For the month of February, the biotechs corrected sideways, through time, like many areas of the market. Considering how high beta the sector tends to be, the high and tight bull flag on the weekly chart of IBB, the sector ETF, is even more impressive than usual. Note how the 2011 highs have been clearly held above, despite the occasional shakeout with the shadows on those weekly candles.
The next price trigger would be a move through $122 on the IBB with buy volume coming back in, although the overall volume pattern has remained bullish.

I want to constantly remind myself that when a sector shows immediately strength of this magnitude to start the year off, it is a distinct possibility that the biotechs will be one of, if not the, leaders of the bull going forward.

Members of The PPT and 12631 can click here to see individual biotechnology ideas, sorted by up-to-the-minute PPT Technical scores.

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I’m busy inside 12631 and The PPT looking through my screens this morning.

Be back with more later…

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The market uptrend is flexing its muscles this morning, with a poor durable goods number pre-market being tossed aside like Ryan Braun’s urine sample. What stands out the most about this tape are the vast number of individual stocks that have digested their recent advances well, and actually are starting to make a push higher for secondary breakouts, such as BWLD CTCT JIVE  LULU PIR SCSS TFM, just to name a few.

The precious metals and miners continue to impress me, making major technical strides on a daily basis. One of my longer-term swing trades inside 12631 has been SLW, and I am still holding that silver miner with a full position. I also think EXK has incredible potential to break out from a tight consolidation on its daily chart. Regarding gold and the gold miners, the metal itself, or the GLD ETF, looks to be out in front.

No uptrend lasts forever, especially without a price correction at some point, but I still have little interest in trying to time that event when the market is acting constructively.