“Traders Only” Chess Links

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Plenty of excellent sites out there include more macro commentary in their links, namely Downtown Josh Brown and Abnormal Returns. I thought I’d share a “Traders Only” collection. Here are the traders that I am reading today (click on links):

• “The Goat,” @gtotoy, with his famous SPY read going forward
• @DerekHernquist with some words of wisdom
• Vj, @vjland, with unique analysis on the market
• @wwwstockrake with a helpful reminder
• @daytrend, Vic’s intraday market stats
• @Speerothekid and the rest of the Young Guns crew with some excellent content
• @ChicagoSean in his new locale on the Stocktwits network

There are plenty of other key sources that I check everyday, so be sure to look on the right hand side of your screen for my “Recommended Links.”

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MARKET WRAP UP 02/01/11

The dip-buyers who stepped in last Friday enjoyed a spectacular sequel to yesterday’s bounce, as the S&P 500 screamed higher to finish up 1.67% to 1307. The materials and technology names led us higher, as breadth was impressive overall, despite modest volume. Regardless of whether today was some sort of first day of the month phenomenon, the bulls were able to clearly print a fresh 52 week high on the S&P.

Nonetheless, the small caps, transportation stocks, emerging markets, and even Nasdaq Composite all failed to confirm the new high. Indeed, the trannies and emerging markets continue to sport technically damaged charts. In the coming days, these divergences are sure to come to forefront as they are likely to be resolved one way or the other.

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The OIH is all the craze these days, seemingly the next “can’t miss” trade. If you believe that price has memory, though, then the monthly chart of the oil services ETF should give pause to the idea of putting on fresh longs here. Note the significance of the $155-$160 level over the past few years, acting as both tough resistance in 2006, followed but sturdy support in 2007-2008. Also note how much more selling happened in late 2008 after this key area gave way during the crash.

After printing five consecutive green monthly candles, the risk/reward to adding longs here–despite whatever geopolitical reasons there may be–is not favorable in the short-term. The most probable scenario over the coming weeks would be a period of digestion or correction upon the first touch of this key area in several years.

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[youtube:http://www.youtube.com/watch?v=fmA1wpAsnxI 550 412]

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Plenty of excellent sites out there include more macro commentary in their links, namely Downtown Josh Brown and Abnormal Returns. I thought I’d share a “Traders Only” collection. Here are the traders that I am reading today (click on links):

• @TrendRida on Brazil and its accompanying stocks
• “The Goat,” @gtotoy, with his famous SPY read going forward
• Vj, @vjland, with unique analysis on the market
• @mb_willoughby with her list of actionable setups
• @traderstewie with setups and analysis for this week
• @daytrend, Vic’s intraday market stats
• @Speerothekid and the rest of the Young Guns crew with some excellent content

There are plenty of other key sources that I check everyday, so be sure to look on the right hand side of your screen for my “Recommended Links.”

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File this one under the “contrary indicators” category.

I was just watching ESPN, and heard famous college basketball enthusiast/love-him-or-hate-him color commentator Dick Vitale describing the college basketball season as an up and down roller coaster ride. He then said, and this is pretty much a direct quote,

“Up and down, up and down. It’s like the stock market…No, wait! It’s not like the stock market. All the stock market does these days is go up, up, up!”

Now, I have to wonder how many non-traders/non-market followers watching the telecast just kind of took that comment in stride, or even nodded their heads in agreement with all of the media coverage this past week about Dow 12,000. I, for one, wanted to jump out of my chair and short every equity known to mankind. In and of itself, though, it is always tough to gauge just how valid a contrary indicator based on sentiment is on “Main Street.” However, I must say that the Dick Vitale comment conjured up memories of that famous quote by Bernard Baruch that he knew it was time to sell at the height of the roaring 20’s, before the 1929 crash, when his shoeshine boy was giving him stock tips. Mind you, I do not see another crash, or even deep bear market, happening anytime soon.

One thing is for sure, though: When you couple the heightened non-financial media coverage of the stock market for much of last week, followed by the technical damage that was done to many key charts on Friday, I would find it awfully tough not to be cautious on the long side here.

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