Some Nice Triggers Yesterday–Will it Follow Through?

By: Scott Redler

Mutual fund Monday continues as the NASD broke new highs, the Russell broke its November top and the S&P is just a stone throw away from new move highs. Look for some continuation moves into the new year. GDP was a little light today, so this might induce some profit-taking in the U.S. dollar–that could help gold catch a bid today; however, I still think gold needs to get down to the $1,060-1,080 area before we get a “real” bounce. Santa is dropping off some presents to those that have ignored the headlines and trusted the market’s consistently strong price action. There is little reason to expect that to change before the New Year. Still, stock selection remains key.

The Rundown:

• Banks played some catch up yesterday, as Goldman and the XLF broke their recent downtrend lines.

• I think XOM is getting more interesting at these levels–I am long from $68.50 and will add through $68.90.

• In big cap tech land–GOOG looks ready to take out the $600 level after Goldman raised its price target to $675. AAPL took out its downtrend line yesterday on some nice volume. See if it can continue today. BIDU has been weaker lately–it looks like it’s coming into bigger support here–watch for a reversal.

• SNDK looks very extended on a short-term basis–if i see some type of weak, negative divergence develop it could be a good active short.

• AIG is forming one of the tightest patterns seen this year–that might resolve soon, and when it does, look for an explosive move. I don’t see an inclination one way or the other, so patiently await that move, rather than anticipating.