The media wants you to think that you can’t time the market. I say you have to! Looking back on the last decade, how did an investor fare who bought the S&P in 2000 and simply held on? They’d be down about 12-15%. With that said, on a micro version, the strategies that are working best this year all involve timing sector breakouts and more importantly, taking advantage of stock-specific three day setups, then sticking around with small size to ride out the move.
Indices closed at new highs yesterday, but the media didn’t get to do their Dow 11,000 dance yet. Today just might be the day. The question is, can it hold the first time it gets into that area?
The Rundown:
Tech stayed mixed.
- Apple (AAPL)–they couldn’t sell the iPad event yesterday. They also just said that they will have an event Thursday so it could keep shorts on their toes.
- Amazon (AMZN)–has some kinks in its technical armor. $130 is an important area to hold.
- Cree (CREE)–this has been on of our favorites for months. It had a huge squeeze yesterday, and I would take some longs off the table there.
- VMWare (VMW)–this is resetting up wtih a new upper range in the $52-55 zone. It could continue higher after a nice move this year. We might need an earnings catalyst to keep this going.
- Intel (INTC)–getting an upper level flag here. The real move for us was from $21-21.50, but I guess it’s worth a look at around $22.75. Not too compelling though.
- Baidu (BIDU)–tight upper range could resolve soon. If the market hangs in, gotta believe this will have some upside. Above $605 and a 60 minute hold in that area could cause another squeeze into new highs.
- Google (GOOG)–not great, very choppy.
Commodities:
- Oil–I sold my USO yesterday at $42. It could go higher, but from $40.40 to $42 is enough for me.
- Gold–keeps moving higher. The GLD is resolving its symmetrical triangle to the upside. I did sell half on the close yesterday, the rest should be trailed.
- Casinos=Cachingos–talk about right place right time! I outlined each one numerous times in the last month. I sold all my Wynn (WYNN) yesterday and only have a small amount of Las Vegas Sands (LVS) left. MGM (MGM) I still have tier 2 and think it works its way to test $14.
The Banks–took the week off. Can they get going again will be VERY IMPORTANT for the market.
- Goldman Sachs (GS) triggered long through $172. Whether it can continue will be key.
- Bank of America (BAC)–has a nice 6-7 month base. Seems like if it can get and stay above $18.20-18.35 we can see a move to the $19-20 area.
- AIG (AIG)–looks setup for its once a month squeeze ***IF big volume comes in***I will add to this position if it can get through $35.60-26 and holds. Then we can see $39-40.
- Union Pacific (UNP), CSX (CSX) and Norfolk Southern (NSC)–I don’t usually trade the rails, but these all have been building nice flags on the daily. With a big upgrade for the sector this morning coming from Barclay’s, they just might have the catalyst they need to get going.
We are in a tricky spot here, as we are starting to get a bit overbought. I would be cautious of a push-through failure where we trade through yesterday’s highs, squeeze out some shorts, then run out of gas and come back through those levels.
