Investment Capitalist

Week of November 10

Still bullish on the market but defensive
in nature. Not putting myself out there for anything, in either
direction. Take trades for the time being and generate cash flow. When
the rally comes, it’ll be obvious. TRIN behaving very bullish all week,
spending Wed & Thur around 3.00 and as high as 4.0. Didn’t show
overbought on Friday. Seemed like major indices were covering up
underlying weakness in equities. SKF and the DOW both positive. Bizarre.

Bank index at 5th point inside triangle pattern. Could jump to 62 if 52-53 holds.

Dow Support at 8350-8380 Heavy resistance @ 9000:

5
year Treasury Yield should rally for several days. It’s possible recent
correlation broke but could re-establish if equity markets rally as
yields rise, suggesting reallocation of capital from safety to risk
based:

Nasdaq
is still holding at 30yr trendline @ 1600-1607. Intraday breakdown to
1540 possible if early weakness on Monday/Tuesday. If 1600 holds, will
rally to 1800:

SPX
trapped between 900-950, with 935 pushing back any rally attempt while
bulls defend 900. Look for break above 935, then 950. If we fall below
900, look for cascade sell-off to 850:

Q’s- 28-29 significant long-term support. If market sells-off early, look long around this level.

Agric.
stocks showed strength due to positive developments regarding strike.
MON, MOS, POT are primary movers and should remain the focus. MOS has
least exposure to strike.

UNG- Excellent set-up for explosive surge higher targeting 35 – 42. But monitor closely for possible flush.

CLF-
1-day reversal around $25 level. 3rd reversal at that level in 5 weeks.
Longer-term multi-year rising channel connects lower boundar with CLF
at $25. May ‘07 stock went above top boundary, Jan. ‘08 accelerated
away in a parabolic top. Overshoot to the downside typical but thus
far, $25 is being held. A rally back to 48-50 possible within long term
bear market.

UYG- Working on S2? Volume for inv. H&S fits.

AAPL-
Could spend 1 more week inside this tight wedge but there will be a
resolution very very soon. Downside target $86/7, upside target 124/5.

BIDU- Entry = $210 area.  $204.28 horizontal support of desc. triangle.
Resistance = $221.50 (24d-SMA), $223-$225 (light horizontal
resistance), $228.50 (s/t downtrend, very steep). d-SAR = $224.90.
Intermediate d/t line = $249.  100d-EMA= $268. 200d-EMA = $279
BIDU
at critical juncture. Long-term pattern suggests massive descending
triangle at 4th point. Rally to 5th pivot possible and based on
short-term technicals, likely to occur soon. If breakout doesn’t happen
in next few days, stock risks breaking below horizontal support. But it
still appears too early for a completion of the triangle top. Last 2
weeks in October, stock had false breakdown below support but
recovered. Weekly stochastics and momentum/money flow turning up from
deeply oversold levels. Stock could easily run to 300-312. 100w-EMA
resisting at around $244, converging with short-term downtrend, which
is too steep and likely to be penetrated. If BIDU rallies to the $310
range, it should be shorted aggressively. Will Chinese stimulus package
boost stocks enough to get BIDU there?

RIMM- $44, then $40.50 are strong support levels for quick trades.

CE- supported at $14. Weekly reversal possible. Rally with rising vol. on Fri. Gap $17.50-$19.25

DNA-
Genentech is squeezing inside apex, with multiple variables converging
together. This is a good bracket trade candidate using options. Will
there be a higher bid? M&A in sector is expected, but CP market
must improve further. Many big-cap BTK have the cash to do a deal
without financing. We’ll see. Roche Bid Price = $89

MON-  Wants to spike to $100, possibly $107-110 area. Monitor very closely.

JPM- S2 forming. Big tails, at critical technical level which has been
dominating this stock for some time now. Rally seen to $53 with
resistance at obvious round numbers.

GS- Something very big is about to happen in Goldman. Multiple positive
divergences in money flow, A/D in longer time frames. Oct & Nov low
is massive $75 level. An intraday flush below that level as a probing
maneuver very possible, followed by severe short-covering into a buying
panic. Best hope is for a big gap down open on Monday. The financials,
especially Goldman, were flashing huge warning signs as market indices
were up big triple digits while SKF implied the market should have
fallen about 450 points.

MA- Still trying to recover breaking below secondary trendline. Could be bought around $135
V- Might want to test 47-48.

STLD- If 9 holds, another rally to 13 likely. Very bullish momentum and money flow patterns. Alpha zone converging ~$21.
AKS- Similar technical set-up as STLD.

FSLR
trading ranges still playable until next big expansion move. EP will
either hold 8 or test $7 again. $8 is .63 fib retrace.

FNM/FRE at trendline levels. Strange action in these stocks. Is equity there worth anything? How is this possible?

Look for any rally in Coal stocks as shoring opportunity. JRCC going to $7.75

Morgan
is attached to its downtrend line. Frozen on it. Market waiting for any
type of catalyst. Event-driven trading will dominate November. Events
including earnings, strikes, regulatory, fiscal, tax policy debate.

SHORT looks:

ICE-
Nice short oppty at upper boundary of 60-85 range. short term MA
convergence @78 but MASSIVE overhead multiple ceilings controlling
longer term trends.

JRCC- Sell $15

GOOG- Below critical support and should resume major downtrend with likely target being secondary channel line.  100%
Fib Proj. converges with secondary downtrend channel line on November
20 around $275. Major bearish patterns forming here. A short anywhere
above $325 is warranted. Ideal entry around $345. Build position over
several days and trade a multi-day move while remaining overnight

Continue making markets wherever possible. Start building biotech basket.