Watchlist for the week of Oct 30 to Nov 2

Last week we had some more distribution on good volume and I'm looking for a little more downside before trying some long swings. I posted this chart last wednesday when I noticed the similarities with the correction from May 2012.

I would love to see the SPY retrace back to the 200d MA, which also coincides with the 50% Fib retracement of the entire move from the June lows. This ~138 level was also an important resistance level in the beginning of the year and in the summer, and also happens to be around the highs from 2011. Finding some support there would make sense to me, but we'll have to see what happens. Notice the bear flag on the daily, similar to the one from May 2012, and the heavy distribution volume.

The only thing that concerns me is that the Russell and the Nasdaq have already retraced 50% of their move from the June lows, and they are somewhat oversold on the dailies. I expect some type of bounce this week, especially after the nice close we had on friday, but overall I'll be looking for more lows in the next couple of weeks.

Here's some stocks I'll be watching this week:

Long: AUQ, MTG, MTB, HGT, TSN, LNG, URI, CTRP

Oversold or dead cat bounce: AVID, VRSN, RGS, NFX, HMSY, MPO, RGS

Red to green: OCN, WAC, ETR

Short: ALXN, ISIS, ARNA, GFI, PPHM, PBT, ROSG,

Parabolic shorts: OFG, OSTK, TASR, PKI, WBMD, AEGR, CYCC, NFLX (might get parabolic, not there yet)


Drop me a line if you want more info on how to play these setups... and good luck this week!