The Line In The Sand

875 has now become the all important number in the S&P 500:

The transport index still displays an inverse head and shoulders pattern, the bull case is still intact as long as we do not breach 3,000:

And, XLF, the financials are now fimly above the 200 day, with a little good news from Goldman Sachs Group, Inc. [[GS]] , the index can easily break through the 50 day:

The momentum is picking back up in the bulls favor here, it all depends on a few key earnings reports. My money is on the bulls, I am currently net long.

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I love the high and tight bull flags, buying this one on any further strength:

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Let’s take a look at the ETF that tracks oil, USO. The ETF is trading right around the 100 day moving average and sitting on an uptrend line. Oil needs to bounce here to prevent a significant breakdown.

I like my chance being long oil here into oversold conditions. Currently I am long ERX, which is the tipple leverage oil & gas ETF, however should the market breakdown, I actually think this will turn into a good pair trade, Long oil ETF, short individual oil & gas stocks. For example let’s take a look at a few charts that with bearish patterns.

The first is Chesapeake Energy Corporation [[CHK]] , this stock displays an attractive bear flag, and on any further weakness I will get short to catch this breakdown.

Up next, let’s take a look at Frontier Oil Corporation [[FTO]] , this one is about to break a heavy support level around $12, I want to get short with a break below the $12 level:

There are plenty more individual names in the oil & gas sector that display similar patterns, but for now I will ride this oversold bounce in oil.

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Dennis Kneale’s latest video found here. Careful, Dennis.

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Earnings

Monday:

• CSX Corporation CSX

Tuesday:

• Goldman Sachs GS
• Intel Corporation INTC
• Johnson & Johnson JNJ
• Yum! Brands, Inc. YUM

Wednesday:

• Texas Industries TXI

Thursday:

• Cypress Semiconductor CY
• Google GOOG
• Harley-Davidson HOG
• International Business Machines IBM
• JPMorgan Chase & Co. JPM
• Nokia NOK

Friday:

• Bank of America Corporation BAC
• Citigroup Inc. C
• General Electric GE

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If you’re a member of The PPT, then you have access to research reports for experenced professionals in the business. Well, one of the reports feature today on the blog is [[ATVI]] , I will save the details for members, but display the chart.

Currently, ATVI is in a great spot to buy with the stock trading right on its uptrend line. I say it’s a great spot, because if wrong, you can easily cut your losses if it breaks below the current uptrend. Risk/Reward; a few cents down, a few points up.

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