October is in the books and we enter this week with a ton of news and events on tap. Traders must be armed with many “if, then” type of strategies. Everyone will make predictions, but nobody knows what the outcomes will be and how the market will react. Ultimately the trader prepared with different plans will be able to act appropriately as this week unfolds. Starting Tuesday with the Election results, into Wednesday’s Fed news and the jobs report Friday. I hope everyone got some rest this weekend, because this is going to be an eventful week.
The S&Ps have been locked in a two-week upper range. The micro range is 1177-1182 on the support side, and 1188-1192 on the resistance side. If you take a bigger look, a 60 minute close below 1175-1178 should give us a move to the 1166-1170 and a 60 minute close above 1188-1192 should trigger a test of 1197 high from last week. If you want to even taker a BIGGER look, if they sell the news this week and we close below 1166-1170 we can test the 1148-1153 area and even reach the 1128-1130 area (probably not this week but later this month). This area would be my line in the sand to buy, which I do feel will hold, but I only put maybe a 30% chance we get this scenario. This area must hold for this year to end with a rally towards the upper end.
If they fail to “sell the news” and the market holds its upper range this week (above 1175-1178), we should see a move thru 1197 and at some point by year’s end we see 1220-1250. I put a 70% chance that this will be the scenario that takes place. The simple version of this: I DO NOT THINK THE MARKET FALLS APART, and I do not think the high of the year is in!
Tech
Apple Inc. (Nasdaq:AAPL) was weaker than usual last week. I would watch the action close today. If it gets sold on open and it trades through Friday’s low of 300.87, I would look for a Red Dog reversal or a potential steal if you can buy around 292-294. If this happens you might even want to sell some November 280 puts for some premium. If Friday’s low holds, I will look to buy if we can break above the mini downtrend that stands around 304-305.
Baidu, Inc. (Nasdaq:BIDU) has been a rock star for us, but it needs time. If it pulls in I think you buy around 107-108. If it hangs around then we can get better momentum buy at a later time
Google Inc. (Nasdaq:GOOG) had great earnings action here for us. It’s holding the upper range but a bit sloppy. If tech gets hit today GOOG stock might take a discount if it breaks below 613 and retests the 605-606 level. If we hold 610, I’m still in the camp that this stock makes new highs this year.
Amazon.com, Inc. (Nasdaq:AMZN) had a controlled pull-in after earnings back to 165. I’m avoiding this for now.
Netflix, Inc. (Nasdaq:NFLX) is still holding upper earnings range. We had a RedDog reversal into 185 and a controlled three day pull-in. I will not look here today and will give it more time.
Riverbed Technology, Inc. (Nasdaq:RVBD) has turned into a strong market leader, but also needs time before it is a compelling buy.
Research In Motion Limited (Nasdaq:RIMM) was a laggard for most of the year, but we felt sentiment had gotten too low on the stock. RIMM gave us nice action over the last two weeks after we listed it at 49. The stock ignited on October 25th, and could use a bit of rest.
Casinos
Las Vegas Sands Corp (NYSE:LVS) exceeded all my targets. We said back at 19 we will see 30 this year, now it’s at 45 with a big weekly resistance around 49-52. Congrats if you stayed with this monster.
Wynn Resorts, Limited (Nasdaq:WYNN) still has a set up with earnings this week. The measured move is 113-115, so above 108-109 can be a nice trigger. It might need earnings to get there.
MGM Resorts International (NYSE:MGM) is almost an avoid, but if you trade it buy vs. 10.80 for a move back to 12-13.
Banks
Goldman Sachs Group Inc. (NYSE:GS) continues to make new highs every few days. Most of move is done for now, but it has room to 165-168.
JP Morgan Chase & Co. (NYSE:JPM), we haven’t looked at this one in a while, but it has a small pivot around 38 to buy if you want to own this.
SPDR Gold Trust ETF (NYSE:GLD) after a nice rest and reset, the precious metal looks like it’s proving you can buy again. If you sold into strength, some traders bought back GLD back around 130. I bought and sold and am flat this second.
Agricultural group still strong.
Potash Corp. of Saskatchewan (NYSE:POT) been in this choppy sloppy upper range since takeover news. Traders hate this stock now. You could buy some December 150 calls here because trading it has been frustrating.
Agrium Inc. (NYSE:AGU) looks ready for new highs through 88.
CF Industries Holdings, Inc. (NYSE:CF) and The Mosaic Company (NYSE:MOS) are strong but not set-up at the moment.
Molycorp Inc (NYSE:MCP) and Rare Earth Resources Ltd (AMEX:REE) have been a must trade for our guys. REE we caught around 6 then again 8. Now it’s just a trade both ways. MCP caught momentum from 24 then again above 30. Now we are playing both sides.
I am flat coming into this week, and it feels good. I will look for opportunities both ways and try follow my rules as closely as possible.
