SPY talk

In retrospect, it would have been too cute for 88.5 to hold -- we broke it, hit the 20 SMA and bounced. Unless we get new "green shoots" data in the following weeks then the next logical place for SPY is the 50 SMA around 83 zone.

SPY 88.5

Three touches now on this level. How cool is that?


Update: We jinxed it -- SPY now under minor support intraday. Close today will be significant.

So far So good

As we wrote last night in our newsletter we were looking for a bounce on the commodities today. So far so good -- however, now the big test comes as whether the bounce finds continuation back to the highs or whether it simply sets up new shorts (today's lows).








fff

Day of Opportunity

These are all the stocks that triggered our numbers today from last night's newsletter:

Let's start with the two longs that went over our spots:

POT 103.


MOS 48.


JOYG 28 short.

BUCY 24 short.



BRCM 21 short.


ATI 36 short.



SPG 49 short.


Join us for a 1 month trial -- (no credit cards required) and test out our system.

Bucket of Cold Water on the XLF

We have great respect for Meredith Whitney. She saw the cracks in the house of cards before the crisis, then before the latest bank earnings came out she said she wouldn't be short the financials (because of the Government intervention) and now after the rally she says she wouldn't own them. As good as it gets for an analyst.

If you haven't already seen this then sit down for the next 10 minutes and soak it all in:

Intraday Updates

Thus far today the bulls have done a very good job of holding support. These are intraday updates of the daily charts -- look how well support held this morning. If the sell-off is to gain any traction then the bears have to push through the following support levels:

XLB 26 area held. If that goes later in the day, watch for a dive to 25.


The 20 SMA held on the QQQQ; the Nasdaq was the weakest index last week, and now is the first one to bounce.




KOL bounced near support (and 200 MA)in the 21.4 area.


Perfect example of one of our favorite commodity plays, BTU, bouncing on previous minor support of 31.

XME bounced on 35 support.



Watch those levels -- if they go and selling accelerates then it's likely this is not just a 1 day pull-back.

Market Talk

With the exception of the Nasdaq weakness (as we discussed on Friday) the bulls are still in control; however, this could change soon.

XLF long to the 200 SMA, after that we'll be looking for reversal shorts.


Commercial Real Estate looks like it has one more pop left but will offer an excellent shorting opportunity at the 200 SMA. Unless IYR shows very clear relative weakness, stay long until 40. Ideally we run for a day, and then gap-up to 40 -- that would be a very nice risk/reward spot short on 40 resistance.



If you're leaning bearish then hope for quick max pain; the longer we base under resistance the more chance that the break-out will be successful. This is the reason we're hoping for a very big run or gap-up to resistance as the urge to take profits will be very strong compared to a slow grind up and base at resistance (which would increase the success rate of any break-out). So if you're a bear, hope for a big 2 day rally!