The Indices surged today with new highs in the Dow and S&P. While the Nasdaq and Russell were strong today, it is interesting to note that they didn't make new high and are therefore lagging. Typically, these are the indices that should lead rallies, as they show investors are willing to speculate on riskier equities. When large caps lead the way, it shows rotation to more defensive stocks.

That being said, the potential for another strong leg up is high. The Nasdaq cleared the triangle it has been forming and the semiconductors had a nice day.

Here is a chart showing the four major indices and how the Big Caps are leading the way right now.


As usual, I will be taking the day off from regular trading tomorrow as it is options expiration. Good Luck,


DT

Today was probably the most boring day I have seen in over a year. It seemed like nothing could gain traction and moves to either direction were snuffed out pretty quickly. I have to give the bulls the benefit of the doubt due to the persistence of the previous trend. Here is an updated hourly charts of the Q's. Notice that they are starting to make higher lows and indicators are starting to come of oversold status. We could have a little bounce into expirations.

PEIX fell out of the triangle a few days ago, but is at much stronger support. I am watching for the first move higher.
CPX is even more dead then the indices. Watch for the move out of either side of the triangle.
CERN held strong today and made a higher daily high in fact. If it continues higher tomorrow then it might be ready to take a trip to the upper band.

If you haven't had a chance to check it out, the HighChartPattern team was interviewed on stocktickr.

Good Luck,

DT

While the equity markets didn't do much today after the fed meeting minutes were released, there was an interesting move in the dollar. With the Fed acknowledging worries about housing and a slowing economy, the markets reacted by pushing bond yields down and bond prices higher. This also caused Gold and Silver to tick up as the dollar was weaker.

Here is a 60 minute chart of TLT showing the move higher after the minutes were released.


Check out how Gold as shown by the GLD etf has correlated with Bond prices as shown by the TLT etf the past few months. This shows how gold has been closely correlated to fluctuations in the dollar. With TLT possibly moving higher, Gold and silver may follow suit the next few days.

With that in mind I am looking at possible moves in a couple miners.

Silver Wheaton Corp. (USA) (Public, NYSE:SLW)
Here is a chart of SLW possibly turning at the lower band. There is probably a high chance of failure, but if it bounces here, then it could be off to the races.


Goldcorp Inc. (USA) (Public, NYSE:GG)
Goldcorp has held up better then SLW recently, drifting back to the 20sma. It could attempt to breakout soon.


I'm a little mixed on equities right now, as although some of my positions held up well today, I couldn't help notice weakness in leaders like AAPL and RIMM today. We'll see what tomorrow brings.

Good Luck,

DT

PS. Instantbull has a new Chatter Analysis where they take a look at the news behind the 10 most searched stocks in their community each week. Just go to their home page and enter a stock and click go.

So tomorrow is another Fed day and I won't even attempt to guess at how the markets will react. Practically everyone expects no change and it may turn into a non event, but I have been seeing a lot of people hanging their hopes of the Santa Claus rally kicking off after tomorrow. The contrarian in me thinks fading that type of reaction would work out, but the markets are still punishing shorts. That may change soon, but it hasn't happened yet. Here are a few more charts I am adding to the watchlist.


Coinstar, Inc. (Public, NASDAQ:CSTR)
CSTR has a pretty nice looking chart here pulling back to converging support. The 50sma, Bollinger Band, and two trendlines should contain this pullback.


The Andersons, Inc. (Public, NASDAQ:ANDE)
ANDE should find support in this area near the previous pivot high and the lower bollinger band.


Research In Motion Limited (USA) (Public, NASDAQ:RIMM)
RIMM has had a heck of a run and is making its first pullback to the 50sma and lower band. While it probably won't reverse on a dime here there could still be a decent trade over the next few days.


Good Luck,

DT

It seems that the indices are stuck in a near term trading range. I am watching the 44.20 level on the Q's as one of my market indicators. If it can get above it on volume, then I will be looking to get a little more aggressive on the long side. Here are a few charts I am watching this week.

Applied Digital Solutions, Inc. (Public, NASDAQ:ADSX)
ADSX is probably off a lot of traders eyes being that it is under $5 a share, however, the chart is looking pretty good here. This is a nice pennant it's basing from.


Complete Production Services, Inc. (Public, NYSE:CPX)
CPX is trading a small triangle after clearing the downtrend. If it leaves the upper side of the triangle, then a nice move should be coming.


Catuity, Inc. (Public, NASDAQ:CTTY)
CTTY is a wild trader that is starting to get some interest back. It is trading a loose pennant here and may come back to the 20 sma before moving higher.


Citrix Systems, Inc. (Public, NASDAQ:CTXS)
CTXS has been beaten down the second half of this year, but it seems pretty clear that buyers have been waiting in the 27-28 range. It looks like it is starting to turn back up and may make a decent trade.


Penn National Gaming, Inc (Public, NASDAQ:PENN)
Gaming and Casinos have been hot and PENN is looking like it may try and clear this base. It may pullback further, but Fridays narrow range candle may be showing some hesitation to push it down any lower.


Playtex Products, Inc. (Public, NYSE:PYX)
PYX has been trading a very tight range after clearing an ascending triangle. I will be watching volume closely on it.


Quality Systems, Inc. (Public, NASDAQ:QSII)
At first glance the QSII chart looks pretty ugly, but looking closer, there is obvious support in the prior breakaway gap. It has formed two doji like candles signifying some indecision in a support area after a near term downtrend. While it's only a clue, it bears watching.


Rambus Inc. (Public, NASDAQ:RMBS)
RMBS has refused to go down recently and the 20sma is catching up to price. The 200sma looms above as resistance, but RMBS could easily catch some momemtum and clear it.


SIFCO Industries, Inc. (Public, AMEX:SIF)
SIF is a very low float "cheapo", but this chart looks very interesting. Volume has come in and it is working off the breakout day very constructively. It looks like it may bounce off the 20sma here.

I still have the few short setups on my list from last week, but I am thinking that it's best to wait for the indices to be in a confirmed downtrend before looking too seriously at short setups.

Good Luck,

DT