Sunday, October 21, 2012

Watchlist for Oct 21-25

We had a pretty heavy distribution day on friday and the Russell and Nasdaq broke some important levels of support. The SPY and DIA are right on support, but it doesn't look like this support will hold this week. The SPY had been in a range for almost 2 months, but now it seem like we will breakout of the box lower.  I suspect we might have a day or two of bounce in the cards perhaps this week, but friday was a big sign that we're not done going lower in my opinion. There is growing evidence that we may have put in an intermediate term top:
- high volume distribution
- attempting to make new highs, but not being able to (SPY for example)
- breaking significant levels of support
- other factors, including the weakness is former market leaders (GOOG, AAPL, etc)



Another important factor to note is the MACD and RSI divergences on the weekly charts, here's an example with SPY:



The only three sectors that seem to be holding to be holding up ok are the financials and the silver and gold miners (SIL, GDX).

To be honest, I didn't find many great setups, so I'll probably be more cautious this week... in any case, here are a few stocks to watch this week:

Long: BAC, JAG, AEM, AUY, AUQ, BBG, HGT, INSM, TSN, CNC, MDRX

Short: CRR, GFI, MPO, TSO, FITB, PB, GDOT, ACW, ROSG, ALNY, JAZZ, GILD, PPHM

Parabolic shorts: OEH, GIVN, GURE, HLSS, DF, MEET


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