STOCKS ARE UP. LET’S MAKE IT A GOOD MORNING

Stocks got the small gap up I was looking for, and are seeing some decent follow through off the open. I’m bouncing back from last weeks ball stompage, which was entirely my fault, having fallen into a stupor after watching the incredible gains stack up asthe first week of the month drew to a close.

In order to keep this market in tact here today, oil needs to participate. The energy stocks want to rip so bad, you can feel it. Oil inventories hit 0.25m bbls vs 1.9 forecast and the initial response here is a push lower.  Any strength here and it could turn into a pretty good day.

A few months back I made the call of ATH’s by 12/11. If we continue Monday’s reversal from here, I might just make that time frame.

On the day I like $BCEI, $KBH and $ZG.

More later,

OA

Canadian Pacific Railway Ltd. (CP.T) on Tuesday said it proposed a merger with Norfolk Southern Corp. (NSC) to create a transcontinental railroad company with potential for stronger earnings growth. The Canadian railroad did not detail what its bidding price is other than to say that its proposal “includes a sizable premium.” Bloomberg reported Canadian Pacific’s interest in its American competitor last week (http://www.bloomberg.com/news/articles/2015-11-09/canadian-pacific-said-to-explore-takeover-of-norfolk-southern). Shares of Norfolk Southern surged more than 6% while Canadian Pacific shares slid 0.5% in Tuesday’s after-hours trading.

A little consolidation in the space might get some of the competitors off the mat?

Keep an eye $CSX, $CNI $KSU and $GWR. Decent patterns setting up there on the weekly and monthly charts.

I made the comment at the low of the session yesterday that we were being mislead about the market. The gawking, anxiety, and overall tone of comments pouring in were helpful in making that call.

How has the market postured its participants this week?

The end of last week flipped many back into the bear camp. Those that were waiting for a pullback? Seemed like fewer took the opportunity to buy.

I have to say that the slow sell yesterday morning was intended to assist you in giving up positions, or confirming a bearish bias towards the market. As the market rallied, many watched in disbelief.

What about today’s price action? Many felt that they didn’t do enough with the market yesterday, because they didn’t believe the strength at first, and some didn’t want to chase it. Is it possible that the early grind up was to get folks buying early, just to stop them out on the way back down and get folks to short down on the day?

I suppose we’ll know by the close. The $TICK showed buy and sell extremes on the session, but what is the pain trade here? An early rally that fades like this removes early buyers and sucks in new shorts on the way down, right?

Gap up tomorrow?

Man, tough news about Charlie Sheen today. Tough call to keep that information to yourself when your lifestyle puts so many others at risk. Here come the lawsuits, buddy.

I’ve run through a few scans, and my lists haven’t changed much. In other words, I didn’t see anything all that more compelling than what I am watching. Here’s a rundown:

$ZG, $DATA, $YRCW, $KBH, $EWZ, $YINN, $UAL, $BCEI, $MBLY $IMMR, $CLDX

Seems so quiet out there today. Starting to wonder if yesterday’s dip and drive action caught people offsides a bit. It was pretty noisy around here early on yesterday, but has gotten much quieter.

If you’ve rationalized chasing the market up today, let me know. I’ll book that $TNA if that’s the case.

More later,

OA

I had originally thought that the market would chop around last week and most of this week. Thursday and Friday really stuck a fork in the idea of a range. Due to the quick selling, the turkey rally started a few days earlier than I had anticipated. Had we not sold hard into the weekend, we wouldn’t have hit oversold levels as quickly as we did.

From an analysis perspective, $HYG has been green all morning, which confirms the higher low from October. A nice rip in oil could go a long way for the overall market here.

I like $YINN here this morning, and that’s about it. I’m going to refresh some scans to find a few new set-ups. Will share the results in a few.

OA

I’m so glad you could make it. Thank you for attending our event.

If you’ve signed up, you were sent an email with login instructions to attend live via webinar. If you are not planning on attending live, you will receive another email tonight with instructions on how to obtain the session recording.

I put a significant amount of time into the presentation, and am looking forward to presenting it. It will take all 5 evenings to get though, so be prepared. Each session will complete with ample Q&A at the end.

Tonight’s Session: Understanding Market Dynamics

If you have any questions, please reach out to me in advance: [email protected]

Once the session has started, I won’t be able to assist with logging in until the session is complete.

I will open the webinar at 7pm to allow all to get logged in and test their audio & visual. Best to login a little early tonight.

OA