Thursday, June 28, 2007

Trade Ideas: GSH, NFP, HNZ, RCL, WW, MEL, SY, CMP

Difficult to gauge the reaction to the Fed since the buying came yesterday, rather than today. Today's finish was weak - but given it held all of yesterday's gains the initial reaction would appear positive. One concern on the technical front is the sharp drop in money flow for the key indices. June lows look pivotal if markets don't want to see a test of February highs and/or the 200-day MAs. The S&P is perhaps the index to watch as it is struggling at these levels the most.

The candlestick dojis created by today's close on initial inspection imply weakness, but given short term market conditions (< 3 weeks) and intermediate term (1-6 months) are oversold-to-neutral rather than overbought the significance of the formation on these time frames is reduced - so further upside to early June highs is well within range (as an aside, the late May and early June dojis in the Nasdaq did occur at overbought conditions for both short term and intermediate term time frames implying the 2,626-2,635 range as an important resistance level for the next 6 months).

The Trade-Ideas scan was decent enough, but it would have been hard for it to have repeated the strong buying of yesterday; the top-8 picks covered a sluggish 24 minutes, but the "20-appearance" list came in at a more positive 1 hour and 40 minutes.

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