Keep Your Eyes on the Prize

______________________

Following-up on my “Energy Maxing Out” post from two weeks ago, both the XLE (ETF for energy stocks) and SLB (best of breed oil service play) continue to hold major, long-term support despite wild broad market swings. I see plenty of ambitious bears who seem quite certain of a breakdown taking us much, much lower. However, I am not too interested in any type of swing trading from a short perspective until we see these major levels lost.

The prior levels that I discussed earlier in the summer were essentially short-to-intermediate-term levels of importance, which we obviously lost. The extrapolators have inferred from losing the intermediate-term areas that all hell is about to break loose. You should remember those same extrapolators were calling for 800 on the S&P 500 at the depths of last summer’s bottom.

The levels I am now referring to are long-term and should not be taken lightly at all–Just look at how tough it has been for bears to break through them of late. In particular, I am referring to the $62/$63 area on the XLE, and $72 on SLB.

Block out the noise and keep your eyes on those prizes.

______________________

______________________

Comments »

If human emotions are reflected in stock prices, and human emotions tend to repeat themselves in a fairly predictable way, then it is worth checking out the uncanny resemblance the current S&P 500 technical setup is to the middle of last summer’s.

The first chart below is June 2010, where we saw a major breakdown, including May’s flash crash. Note the huge leg lower, followed by an eventual double-bottom, and then another final leg lower to arrive at a true bottom. Is it guaranteed to happen again? Absolutely not. In fact, it may be too obvious to see the same result. I have no way of knowing just how many traders are aware of the similarities.

Either way, I said last night on my recap that 1180 was a very key level, and the market is struggling to hold it here.

_____________________

_____________________

Comments »

______________________

I see that CNBC is reporting that Taco Bell has been one of the few major job creating companies of late. Taco Bell is a subsidiary of Yum! Brands, which includes other firms such as KFC and Pizza Hut. One thing to keep in mind is that Yum! has massive exposure to emerging markets, especially China.

There has been a lot of discussion about whether China’s slowing economy will face a “hard” or “soft” landing. Apart from copper, rather than getting bogged down in the data, I prefer to look at whether the apparently rising large middle class in China continues to spend money going out to eat casual/fast food. Remember, data is just data if no ones acts on it. The jobs number this morning WAS, in fact, horrible because the market told us so. If the Chinese continue to go out for KFC, I expect Yum! to find solid support in the mid-$40’s. If the stock loses that area, perhaps the China bears may be on to something.

______________________

Comments »

___________________________

After a rather dismal jobs report, the market is reacting in a decidedly negative manner. I had discussed some key S&P 500 levels on my video recap last evening, and we opened below 1200. Currently, the bulls are trying to hold above 1180. While some stocks are not necessarily getting slaughtered, down only 1-2%, the only real action that I see on the long side is with the precious metals miners, as RaginCajun and JakeGint have pointed out.

One miner in particular I am stalking is CDE. As you can see on its daily chart below, above $30 would be a major breakout for this heavily shorted silver miner, given that price has acted as both prior key support and resistance.

___________________________

 

Comments »

_________________________

It is a thinly traded stock (be careful with market orders), so perhaps it trades in its own world separate from the market, but keep an eye on Nathan’s Famous. I mentioned the stock before their famous July 4th Coney Island Hot Dog Eating Contest, and the stock has been working through a massive cup and handle since. Breaking above $19.50 is the key here.

_________________________

Comments »

Direct Video Link Click Here

 

Comments »