The Financial Lotto Returns

Today we get huge moves from the likes of American International Group, Inc. [[AIG]] , Freddie Mac [[FRE]] , & Fannie Mae [[FNM]] . Chart addict absolutely knocked the cover off the ball with AIG, and I’ve been long FRE since yesterday, noted in The PPT.

What else do we have today? Well for one, rumor has it that Paulson is taking a big position in the dollar, that can’t be good for commodities.

[[UNG]] continues to move lower, however I stepped up to the plate and bought a little this morning. The spread between oil & nat gas is getting a little absurd. If congress would move to nat gas as a clean fuel, the commodity could easily double.

Not much else to say, just taking it light this week with all the sideways action. Option expiration is Friday so expect some more market trickery.

Let’s go FRE!

Being that it is option expiration week, I would not be surprised to see a large move in the next few days. In my opinion, the bulls needed a stronger close to really run with the ball here, yet failed to bring it.

Going through my screens tonight I am still seeing a number of short setups taking place. On market weakness, I want to get short the following names:

Bed Bath & Beyond Inc. [[BBBY]] Look for a break in this bear wedge to get short:

Ameriprise Financial, Inc. [[AMP]] Look for a breakdown below $27.30

Reliance Steel & Aluminum Reliance Steel & Aluminum Reliance Steel & Aluminum Reliance Steel & Aluminum [[RS]] We got our trendline break today

Synchronoss Technologies, Inc. [[SNCR]] Look for a move below the 200 day moving average to get short

Digital River, Inc. [[DRIV]] Look to get short with a break below $33.50

Note: Danny has some great charts explaining buying and selling pressure, go check them out.

This market got a shot of testosterone this afternoon, breaking above a few resistance points. I am guilty of trying to play the downside as I thought we might see a pullback after this epic run.

As of yesterday my portfolio turned into a damn drug ETF, full of high beta healthcare names. In the space we finally got our breakout in [[CTIC]] , but I’m curious to see if we can get above 1.85. Also, keep an eye on [[INO]] , this one could run on strength.

If you find yourself looking for some long exposure, look for stocks that have pulled back to their 50 day moving average, such as 4g play Clearwire Corporation [[CLWR]]

With the S&P retracing back to the 20 day moving average, it may be time to take a few shots on the short side. Looking at the chart below, I am comfortable shorting here, with a stop above the 20 day MA:

A few names to watch:

The Buckle, Inc. [[BKE]] look for a close below the 200 day:

Reliance Steel & Aluminum [[RS]] look for a break in the trendline:

[[KIRK]] looking for a pullback to the 100 day, stop above 50 day:

Synaptics, Incorporated [[SYNA]] nice retrace back to resistance:

Sorry for not posting my nightly screens, but I think the wife caught the swine flu (she is very sick). So with me playing doctor last night, healthcare was on my mind, especially drug company [[OCLS]] . I took a position in the name this morning at the open and it looks good to hit 3 bucks. I’m also still in Ariad Pharmaceuticals, Inc. [[ARIA]] , [[INO]] , [[DVAX]] & [[CTIC]] .

I’m also sorting through a few names in Medical Equipment, stocks like CryoLife, Inc. [[CRY]] & Align Technology, Inc. [[ALGN]] ripped yesterday and I’m watching the group for breakouts.

Note:  Two healthcare names in the top ten (PPT score): Check out ArthroCare Corporation [[ARTC]] & Sinovac Biotech Ltd. [[SVA]]

As far as the overall market goes, I’m staying nimble for now. I still believe we will see more weakness before strength. I will continue to look for breakouts such as Orbitz Worldwide, Inc. [[OWW]] & pullbacks to support, such as Clearwire Corporation [[CLWR]] .

I took Fly’s advice and closed out a few positions to free up cash. I don’t plan on trading much today as I will wait to see how things set up. If I was to guess, I would say that we still have more downside in the near future, maybe to S&P 950 or so.

Once we get near that level, I will start to deploy some of my cash to a few of the 4g plays, as well as a few commodity plays. For now, I will continue to look for breakdowns/breakouts for quick trades.

As of this morning, I took home Reliance Steel & Aluminum [[RS]] short and plan to hold for a swing. I’m also looking to buy a few puts on AutoZone, Inc. [[AZO]], I love the retrace right back to the 200 day moving average, setting up a low risk/reward play:

Not much else to say other than be careful on the long side, I think it’s very possible we pullback all week– I mean it is option expiration week.