Bulls take over

Posted by downtowntrader | 9/12/2006 09:20:00 PM | 0 comments »

I'm still in vacation mode and trying to get back in synch with the markets. Congrats to those who have taken recent picks such as HAL, NTRI, CXW, INFA, etc. I am taking it light this week until I can get some time over the upcoming weekend to pore over my usual number of charts. Still I feel good that I was able to take some good trades today, especially on the daytrade side in tech stocks such as MRVL, RMBS, and RACK.

The bulls took over and squeezed the shorts today and had a strong day. All the indices closed near the highs of the days and were led by the Nasdaq and semiconductors. All of this bodes well for near term action, however, there are warning signs all over the place of an impending downturn in the intermediate timeframe.

I'm having problems with annotating my charts tonight so I will just post what is already saved.

Here is a chart of the Dow which looks like it will test it's 52 week highs in the coming days. There are a couple of clues to underlying weakness such as the still negative MACD histogram.
Same story for the SP500.
I posted this chart a few times warning of a possible top in commodities and it looks like a good time to revisit the chart. The CRB has fallen out of the bollinger bands after the clues of weakness given earlier. With the dollar possibly strengthening, it looks like commodities could be in for a cyclical bear market. The ratio charts under the chart have all broken support.
ORB looks like it is ready to move higher.
RACK was a nice daytrade today but it also looks like it can make a nice quick swing trade. This is still a stock in a downtrend with downsloping MA's, but we have some positive items as well such as a MACD and RSI divergence, and a nice candle pattern today. I held a few shares over from my daytrade and may add on weakness.
REDF is in a similar situation to RACK but may have a nice short term move.
BMC is trading tightly as it tries to break resistance. Keep an eye on it if the markets follow through tomorrow.

CTSH has been getting sold at this level, however, maybe the third breakout attempt is a charm.

Good Luck tomorrow,