Posts Weekend commentary

Markets remain in holding a pattern as London terror fears failed to break what had been a market struggling at the 50-day MAs (tech markets and small caps), or holding weak breakouts (large caps). Volume dropped for a second day, further weakening Friday's action. The NASDAQ and NASDAQ 100 held the bullish divergences in the +DI and MACD lines. For these indices, the 20-day MA was firm resistance in May and June, false breakouts were posted in late June before succeeding in early August, and have held to this day. Price action remains inside the bounds of channel support and resistance and could easily move to test one, or the other, without changing the direction of the intermediate term trend - so don't look for any significant change in the NASDAQ and NASDAQ 100 soon. Of the indicators, on-balance-volume is the one to watch - it has held firm to its distribution trend since May and if its 20-day MA is crossed to the upside it will mark a switch in favor of accumulation.

Collective2: RICK and HMSY out

Some dicey action in RICK saw an end to its attempt to break $7.50 resistance. The stock did find support at the 50-day MA, but closed below its previous area of demand at $7.25. The 1,250 share lot closed for a loss of -$550 . The second pick, HMSY , was stopped out intraday, following some light volume action. The stock was able to close above what I would consider support at $11.50 (although on a 10-min chart, it failed to end the day above support, in this time frame, at $11.80). But given I use fixed stop prices, the play was stopped out at $11.49 for a +$970 gain on a 1,000 share lot. Collective2


The terror threat didn't bring the wave of fear selling it otherwise could have in a vulnerable market. No great move either direction, although the Russell 2000 has managed to find some grip at 671. The Trade Ideas scan was also behaving more brisk. Today's picks covered a time span of 6 minutes . Some interesting pullback plays to moving average support for the likes of VVI , BWD , and to a lesser extent: CMP , PWEI and SRP . Recent bullish crosses of the 20-day and 50-day MAs can be found in VVI , AMT , SRP , CMP and EWQ . AMT was the only pick to appear twice over the time period. Trade Ideas If you would like to try a full version of the Trade-Ideas software, follow this link for a free 7-day trial.

UK foils aircraft terror plot

Will this be the cue for a crash? More likely it will sound the end for hand-luggage allowances. Bye bye electronic devices; laptops, IPods, portable game players, mobile phones.... No surprise to see futures down: Dow down 49 , Nasdaq 100 down 7 , Russell 2000 down 6 , and S&P down 6 .


Bears again stepped up to the plate in afternoon trading to bully markets down. It was like death row for the Trade Ideas scan with nothing in the last 15 minutes of trading, and the eight-picks which were selected required 80 minutes . Alberto Culver ( ACV ) made the greatest number of appearances over this period; 9 in all. Muniyield Fund ( MYD ) was the only pick to manage a bullish cross of its 20-day/50-day MAs. While Sigma-Aldrich ( SIAL ) did the opposite. If you can handle the volatility, Dynegy ( DYN ), may have the best opportunity to move forward. The stock staged another successful defence of the 50-day MA, while building a challenge of major resistance at $5.75. The weekly chart shows an almost 2-year bullish ascending triangle, part of a lengthy base going back to 2002 (see a point-n-figure chart). Trade Ideas If you would like to try a full version of the Trade-Ideas software, follow this link for a free 7-day trial.

Collective2: WXH and SNX out

Two relatively illiquid plays were knocked out by intraday volatility. Synnex Corp. ( SNX ) was entered on the premise of support at the 20-day MA and increased volume interest. Unfortunately, the stock failed to push off this average in line with volume accumulation. The stock trades in a sideways pattern. An adjusted pivot buy price for the stock would be at $21.10. Winston Hotels ( WXH ) made a rare, one-day intraday excursion, outside of $12 support and down to the 50-day MA. This trip was enough to hit the original stop price set in July. As with the previous pick, volume interest favors the bulls, although there would be some concern for a potential double top. The 800 share WXH lot closed for a loss of -$696 . The 500 share SNX lot closed for a loss of -$388 . Collective2


The market didn't take too kindly to the Fed breaking with recent tradition and stalling on the rate hikes. The path towards selling was all too easy to follow once the lull of pre-Fed trading was broken. A better sense of the Fed decision will be given after traders have had the chance to sleep on it. The Russell 2000 came out the worst of the indices as it switched roles with the Nasdaq to become the lazy laggard ( Large caps > Tech > Small caps ). The lack of buying was also evident in the Trade Ideas scan as the following eight picks (the majority of which were conservative, dividend/income funds) covered a time span of 60 minutes. The bulk of the picks are in well established trends with LEO and NCV the only two picks to benefit from recent bullish crosses in the 20-day MA/50-day MAs. A typical flight to safety. Trade Ideas If you would like to try a full version of the Trade-Ideas software, follow this link for a free 7-day trial.


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