Following THE GENERALS Into Battle

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I bought full positions in two more market leaders, $AMZN and $BIDU.

Trades time-stamped in The PPT.

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TOTAL PORTFOLIO:

EQUITIES/ETF’s: 44%

• LONG: 44% ($AMZN $BIDU $DDS $HRC $NFLX $SCSS $WEN)

CASH: 56%

[youtube:http://www.youtube.com/watch?v=ePt1sGBrgWg&feature=related 450 300]r
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After several days of consolidation in the broad market, I am seeing many leaders with constructive charts.

I bought a full position in $NFLX, which is actually the first trade that I have made this week. Why did I buy Netflix? Easy. Chicks dig it (see chart below), and they also dig the launch of 12631 this Friday.

All trades time-stamped in The PPT.

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TOTAL PORTFOLIO:

EQUITIES/ETF’s: 28%

• LONG: 28% ($DDS $HRC $NFLX $SCSS $WEN)

CASH: 72%

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NOTE: I will continue to post broad market commentary even after the launch of the 12631 service this Friday. If you would like to learn more about 12631, click on this link here (the service is only available to members of The PPT). Also, feel free to ask any questions.

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MARKET WRAP UP 11/09/10

Stocks continued to see bouts of profit-taking today in the wake of last week’s powerful breakout to fresh 52 week highs. With the S&P 500 finishing down 0.81% to 1213, the trading session was far from a bloodbath, but it was a party foul after the recent string of festivities that the bulls have enjoyed. Moreover, a fair amount of action junkies got caught with their hands in the momentum cookie jar on the long side. In particular, many of the precious metals and miners saw some nasty intraday reversals, after enjoying some impressive gains over the past few weeks. While one day does not a trend make, today’s action is enough reason to not initiate any fresh longs in the precious metals and their respective miners for a few days, at least until the dust settles.

Beyond the metals, the charts of the market leaders remain in good shape. As I have been saying for the past 100 points or so on the S&P, it is best to err on the side of the prevailing trend, despite how scary any one given day may appear. While we could easily see a few more days like today, that is precisely the reason why I did not proffer my weekly trading setups on Sunday. One can still be bullish within the context of an uptrend without always being heavily invested on the long side. Before you scroll down to my annotated daily charts of the major indices and sectors, take a look at some of these market leaders and decide for yourself if they are truly displaying any signs technically which would indicate a top, rather than a mere bullish continuation pattern.

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The price action over the past two days is a pretty good reason why I was reticent to offer up a slew of setups coming into the early part of this week. After the sharp breakout we saw last week in the market, the bullish scenario was to see a few days of consolidation, while many called for tops and eagerly shorted each pullback. Although I expected to see some red, I still do not see any glaring indications of a major market top. To be sure, the commodities are a bit extended here, and the U.S. Dollar is hanging tough, but that does not necessarily mean equities must fail. Remember, a year ago at this time the risk assets/Dollar inverse relationship decoupled for a brief period of time. Do not automatically assume that stocks must come in if the Dollar rallies here.

Looking ahead, I believe the next few days will be key as to indicating whether we should start loading up on the leaders for traditional run into the holidays. As of this writing, the charts of $AAPL $BIDU $GS $NFLX $GOOG $RIG are all indicating the answer to that question is yes.

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I am still holding on to the majority of my $DDS position. I have been holding for several weeks now, and my patience has paid off thus far. With a relatively low float and big short position, I believe it is still correct to press my edge here.

On the updated daily chart below, note how the stock is flagging high and tight just above prior resistance. What I am looking to see is this level now turn into support, which will surely force more shorts to cover.

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MARKET WRAP UP 11/08/10

Stocks digested last week’s impressive gains today, as the S&P 500 finished down 0.21% to 1223. Volume was light on the leading indices and sectors, which is exactly what bulls want to see after the uptick in buying that accompanied last week’s move to fresh 52 week highs. As I noted last evening, a few more days of this type of price action would do wonders for helping charts reset to provide highly attractive entry points for long swing trades. Although many stocks rested today, there were still some hot areas of momentum, namely in the small-cap China space. Moreover, the leading names are showing no real signs of topping, including $AAPL, $BIDU, $GOOG, $NFLX, just to name a few. In fact, they appear to be preparing for a move higher into the end of 2010.

After the strong rally since September, one of the toughest tasks for many market players is resisting the urge to call a major market top. Indeed, many cannot help themselves, and often end up supplying part of the jet fuel to catapult stocks even higher, via shorting prematurely and getting squeezed. While there is nothing wrong with raising some cash when the market gets too frothy in the short-term, baselessly declaring a major inflection point upon us is more likely to be the bane than a boon for swing traders. The bears must meet a certain burden of proof in order to illustrate that we are nearing a top and, as you might imagine, a mere hunch will not suffice.

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