Week of Nov. 24
FRI:
Is it a coincidence Oil & Gas bottomed on election day?
DFG- Trgt’s 13.50, 14.50, 20
DIG- $50
Tech leading this charge.
Tier 2 Stocks:
BRCM- 2x bottom near completion. Bullish volume. TD buy signal, d-SAR Long. Breakout >18.
EBAY- Recovered secondary trendline. Mulitple buy signals. Above 13.70. Trend channel @ 20, r
2nd tier Financials to monitor:
BX- multiple TD buy signals. Alpha MA at 9.50
There’s just enough data to give the triple ETF’s a look:
BGU- Long Large Cap
BGZ- Short Large Cap
Home Builders are in early stage of rally expected to be significant. Focus on leaders:
BHS- Targets 6.15, 7.50
LEN
ISRG- 173
UYG- 7.15
LVS-
GS (77, 86, 95)
JPM ($31.25, $33.50)
MS (16.25)
PCU (17, 20)
QLD (28.50)
UYG (6.65)
AAPL (100, 105)
URE, WFMI
WED:
Nice action all day. I expect massive gap up Fri. due to Chinese stimulus announced last night but Chinese markets closed for holidays. This will propel Asia higher as well as Europe, and the US will have to gap up to catch up. It’s going to be a stealth rally that finally forces those who haven’t pulled the trigger while watching the market rally 13% to capitulate.
See Builders. Catching up to market as rally spreads. Tide lifting heavily negative sentiment.
SLM- Setting up 2x bottom off $5.50. First target $8, but 2x target 11.50 - 12.50
Short squeeze in gaming stocks: LVS, WYNN
Too many amateur mistakes today. Market shakes are to get weak stock loose. What’s causing me to get thrown out of a perfect trade? Is it because I’m chasing a deficit in the end of the month and therefore pressing with size? That’s not the right thing to do in this market. Stay patient. Wait for the perfect trade to set up, go big and take profits. Trading C, UYG and other lower priced stocks is going to blow your costs through the roof, and you’ll constantly be frustrated. I churned myself to death. Why?
Buying stocks on the assumption that they will “catch up” is bullshit. If GOOG and POT couldn’t get green on a day like Monday, why the hell would you buy them in the last hour when the sellers will be more aggressive than anytime during the day? Started buying GOOG and POT too early, which produced profits but instead of taking the trade, when POT was suggested for an entry, you didn’t stick to your plan. When you were short SKF, covered when Marc went long, which ended up being the dead high of the retracement rally before falling 30 points.
Bank Index needs to retrace to 46.68 (30%). Look for general market to retrace about 15-20%. Volume absent from MS. Unusual.
Nas should go to 1460-90. Long term monthly trendline recovery at 1600. Possible rally to test that level. This market tends to reverse major breakdowns or breakouts, especially on the first move. So expect this to be same. 30yr trendline was broken this month. We are below it now, with a snap-back dead cat rally on Friday. Some areas, like financials, show volume climax. Others, like tech, showing nothing more than a short term bounce, if that. But this could be a monster 2-day rally, or into Monday afternoon, with a sell-off into close. DOn’t forget, there still remains a massive amount of overhead supply. We did not see a “complete” flush in the market. We did see flush in BAC, C, JPM, WFC
Biotech Index - Long term chart uptrend intact. BUT, downside target not yet achieved. Bear flag on weekly measures to 350 (38%). It’s telling you Friday’s rally should be treated with deep suspicion. This might be the biggest headfake rally of the decade, which could turn into a full short squeeze across all stocks, followed by new lows.
Diamonds show major volume bar. Short term reversal to continue to 85:
Q’s could rally to 30-31 and downtrend would still remain intact. There is no indication that Naz has seen a significant low, but could evolve into inv. H&S with current low as H.
CRB Index at 231 level. Should look to energy complex, pure play ag’s. Sentiment at extreme in Oil. Should rally at least 250 or 265 (9-13%). This would be around 35% in individual stocks. Momentum oscillators at all-time extreme lows. Energy stocks still look very bad. Bounce in CRB more likely to be in base metals per Friday’s action in PCU, CLF. This continued leadership in metal & mining stocks indicates market emphasis on Chinese net demand and policies to stimulate China. But long term trend remains massively bearish. See CMC
PCU- Target $15. Inside bracket 10 - 17. 3rd pivot from lower boundary. Huge risk v. reward. Expect stickiness around $12.50 - $13. Volume shows major turnover in float.
C- Massive support at $2.50. If intraday break below, look for recovery bounce. Could have a technical bounce to $5 AND $10. Could also trade between $2.50 - $3.75
URE & UYG- Volume explosion. Panic low is in. Big hammer on Friday. This is high risk/reward macro play. Both likely to go back to $10.
WFC- July gap closed, July low held. Target $30
AGM- Revisit, stock at key t/l. Not at risk of credit blowups. No exposure to toxic paper. Already written down FNM and LEH paper. Target $6
AXP- Volume indicates major turnover of float. Looks like a possible H forming. Try to buy near Friday’s lows around $17.
BAC- Closed on secondary line of downtrend with a hammer and rising volume. Target 17-18
GS- Hammer w/ high volume. Cleared out stops below IPO price. Should rally back to $80’s.
JPM- Definite panic selling all-week. cascade from 35 to 22. Massive volume spike Thur and Fri. Float turnover low 20’s. Still above 2002 low. Could run
STT- s/t pivot following gunned stops <30. Rally to 37-39
USB- Snap back to $30.
PNC- Bear raid last week. Took out stops < $40.
STI- Huge volume bar. Classic selling exhaustion.
STSA- Propensity for short squeezes here.
LM- Higher low, likely inv. H&S. Hammer Friday.
JPM- Monster buy signal on daily TD Sequential. Selling climax at technical level. Major volume spikes. $17 fib. support. Should test $30
LCC and DAL at trendline support. LCC stronger signal of the two.
AMZN- DeMark Sequential Buy Signal (9 count)
BAC- Exhaustion bar
CAT- 2x Bottom, 2nd low
CRM- Bottoming at 22
V- S2? good vol.
FSLR- lower boundary of broadening formation
GOOG- Should see significant bear market rally: 1st trgt 280
Watch MON, forming bear flag (wkly) on top of 200w-EMA. Upper range $91. Sell into rally. Start selling around $84
HBAN- Huge tail on rising volume. Took out stops and closed above support.
EV- Short term bounce good for a few points.
MTB- Possible rally to 70.
FCSX traded 65MM shares and put in 1 day reversal bar. Monster play.
CNX - Should see failry major short term technical bounce. First Fib retrace around $40.75.
alpha zones: 31, 36.50. Possible short term bear trap from Thursday’s closing low.
DRYS volume exhaustion on weekly. NAT yielding 25% FRO yielding 45%. GLNG- TD Sequential 9 count buy trigger. Yields 21%.
An obvious thought when you look back to this period in about 2 weeks is “wow, those were the most obvious panic lows seen in decades”. Look at Citi. Generational transfer of ownership. Mr Pandit’s performance reminded them of the way Dick Fuld, the chief executive of Lehman Brothers, conducted himself as Lehman’s share price fell. “He [Mr Pandit] has waited way too long to break up the bank,” says the co-founder of one private equity firm.
