We had quite a nice bounce last week after being oversold and finding support near 116 on the SPY. The 200d MA provided resistance on firday, and I'm expecting some consolidation after this big move. We have several moving averages underneath which are likely to provide support for now. The unfortunate thing about the move this week was that most of it happened overnight and it was not easy to get long after big >1% gaps up! I think a lot of traders are in this situation, and because of this, not many people have been involved in this bounce and people might end up chasing the idea of a santa claus rally... which means that we might have a nice end of year, but it's still no reason to go all in! Overall, the econimic picture remains bleak in my opinion, especially in Europ, and despite the central intervention this week, my longer term outlook is pretty negative.
So, all this to say that I'm going to try to position myself long~ish for the rest of december, but it will be in small size and short time frame! I'm also looking to take advantage of the some of the parabolic runs that are happening in some of the junk small cap stocks... I remember this happened last december as well, and you can make decent gains if you can find shares to short! I sold out of the few longs that I had this week, and right now, I'm short: MBI, NLST, INHX.
Here's a few stocks I'm watching this week:
long: PCX, ARAY, TRGL, GTIV, BPZ, ECA, JNS, LEAP, SRZ, XCO, AFFY
short: MAKO (on a break of 28), QCOR (if it breaks below the 20d MA), ZAGG (on a break of ~10.6), OSG (on a break of 9.79), ARNA (possible parabolic play)