Breakout or Breakdown

That seems to be the question everyone is asking here. Mac, from Chartswingtrader.com, had an excellent video last night on Goldman Sachs Group, Inc. [[GS]] , he explains that we are close to a major move and you can catch it by simply following Goldman’s chart

If we can get above the $150 – $155 level, you can bank on the overall market breaking out. However, should GS stall here and breakdown, you better have your short list ready.

Currently, I am seeing better short setups than I do long setups, which has me thinking that we could very well roll over. In that event, here’s a quick list of stocks to short on weakness:

Advanced Battery Technologies, Inc. [[ABAT]] , Advance America, Cash Advance Centers [[AEA]] , The Allstate Corporation [[ALL]] , Ameriprise Financial, Inc. [[AMP]] , Blackboard Inc. [[BBBB]] , The Buckle, Inc. [[BKE]] , Chesapeake Energy Corporation [[CHK]] , [[CHS]] , EOG Resources, Inc. [[EOG]] , Freeport-McMoRan Copper & Gold Inc. Freeport-McMoRan Copper & Gold Inc. [[FCX]] , Foot Locker, Inc. [[FL]] , Force Protection, Inc. [[FRPT]] , Frontier Oil Corporation [[FTO]] , Green Mountain Coffee Roasters Inc. [[GMCR]] , Hess Corp. [[HES]] , Starwood Hotels & Resorts Worldwide, Inc Starwood Hotels & Resorts Worldwide, Inc [[HOT]] , Hexcel Corporation [[HXL]] , Intuitive Surgical, Inc. [[ISRG]] , Johnson Controls, Inc. [[JCI]] , Leap Wireless International, Inc. [[LEAP]] , Longtop Financial Technologies Limited [[LFT]] , Massey Energy Company [[MEE]] , PetroQuest Energy, Inc. [[PQ]] , Shanda Interactive Entertainment Ltd ADR [[SNDA]] , Suncor Energy Inc. (USA) [[SU]] , True Religion Apparel, Inc. [[TRLG]] , Under Armour, Inc. [[UA]] , Yanzhou Coal Mining Co. (ADR) [[YZC]]

Dollar index bear flag, good for oil

Chart Swing trader’s new video + key stock to watch

Tri-star Doji pattern, key reversal

Chart Addict’s watchlist

And, for those that missed Woodshedder on CNBC

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.

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

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.

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