I took a day off today and will be doing the same tomorrow, so I don't have much analysis to offer tonight. I basically tracked my open positions on my Treo 700 today, and the way I saw it, today was a slightly bullish consolidation day. Tomorrow is quadruple options expiration day and I'm not sure if we should expect a narrow choppy day or a volatile day. Either way I won't be trading. A reader asked me a while ago why I don't trade expiration days, and the simple reason is I don't feel confident doing so. In MY experience, I have been in more headfakes and false moves then usual on expiration days. I'll see a stock breakout and then some program trade kicks in and knocks it back. I can blame many things for it, but the bottom line is I have had bad days on expiration day before, and whether it's in my head or not, I prefer to just take a day off. Maybe this is my subconscious fooling me into taking a day off, or maybe there is more to the strike pinning phenomena. Out in the blogosphere, I see other traders who feel the same way and others who treat it as any other day. To each his own I guess.

By the way, if any one has ideas for good spots to visit while in Spain, please feel free to comment or shoot me an email.


Good Luck,


Joey

The bulls stepped in today after the markets rolled over in the morning. While I had it in my mind that the indices might find support here, I figured they would rollover after the pathetic action this morning. It seemed like any buying was met with ample supply. Things turned dramatically around lunch time as homebuilders started rallying. I knew something was up when LEND and RATE were rallying sharply. I covered most of my shorts right there and was stopped out on the rest later. So, have we bottomed short term? It's possible, but I don't think it will be clear sailing right now either. I see these hammer type reversal days retested 2-3 bars later more times then not, so it may be choppy the next few days. Add options expiration this week. Then add a fed meeting next week, and the potential for a dead market exists as well. Then on a personal note, I will be traveling to Europe late next week for two weeks, so I'm not sure how I'm gonna play this. I will definitely stand aside the next two days, and then figure out what I want to do next week.

I did find these two charts on my trade-ideas Oversold Strong Stocks scan. While I'm not being overly aggressive or bullish, these are nice chart setups.


Becton, Dickinson and Co. (Public, NYSE:BDX)
BDX has had a pretty orderly pullback to support and had a strong day today on above average volume. These are the kind of stocks that perform the best for me. Double bottom on the lower bollinger band while staying in the upper part of the yearly range.


Cbeyond, Inc. (Public, NASDAQ:CBEY)
CBEY is sporting a similar setup, other then a longer drawn out consolidation. Nonetheless, it had a strong day today as well, also on above average volume.
Good Luck out there.



Joey

Well, that was quick. In a recurring theme, the indices gave back all of the 5 day recovery in one fell swoop. The next few days will be very important as the March lows will surely be tested and whether they hold or not will be instrumental in defining what stage the market is in. Are we still in a corrective phase of the bull market, or have we suddenly rolled into an intermediate to long term decline. Theoretically, the indices could continue to decline further into a C wave which could take it as far as the 61.8% retrace of the July to February advance in a regular correction, but how the March lows hold will provide a clue as to the strength of the bears. Here is a chart of the Q's showing the retrace levels and where support may be found next.

NASDAQ 100 Trust Shares (ETF) (Public, NASDAQ:QQQQ)

It looks like the trend will be down to sideways for at least the next day or two, so I am only looking at shorts again. A lot of stocks had breakaway moves today, so there wasn't much to find at value. Here are a few that still offer decent risk reward setups.

Cognos Incorporated (USA) (Public, NASDAQ:COGN)
COGN is starting to get pushed down by the 20sma and looks to have at least one more leg down, possibly to the 200sma area.


Hewlett-Packard Company (Public, NYSE:HPQ)
HPQ rolled over and retraced back up to the breakdown area. It is starting to head back lower and may also find the 200sma as the next stop.


Carter's, Inc. (Public, NYSE:CRI)
CRI is already in a downtrend, and just had a quick pop to resistance. Some of this move was probably short covering and it's in a downtrend until it proves otherwise.

For those that were hurt today, keep in mind no one knows where the markets will go next. Stick to your stops, and maybe hedge your long portfolio with some inverse ETF's. While we may form a near term bottom soon, we may still be in for a rocky ride for a few months if not longer.



Good Luck,


Joey

The markets had another low volume move higher today. This move up has been rather unimpressive, however, if it keeps inching up like this, then some bears may start covering adding fuel to the bulls cause. I still think the markets will at least retest the recent lows, before the true trend will present itself. Here are a few interesting charts I found.

ConAgra Foods, Inc. (Public, NYSE:CAG)
CAG broke down from a head and shoulders top and is now retracing to test the neckline as resistance. It's looking like it is stalling already and may be ready to begin the downtrend.


Continental Airlines, Inc. (Public, NYSE:CAL)
CAL is another head and shoulders top, however, I think it may retrace higher before resuming the downtrend. With oil dropping today, airlines started to get a little bounce, and if oil continues to retrace a little of the recent move higher then airlines are the direct beneficiaries. I am tracking CAL for a move to the 20sma and then possibly a failure to overcome it.

My buddy Tuff had another excellent post at his new blog, regulationFD. He posted a lot of information on ASEI and asked that I give a technical take. If you haven't checked out his blog, please do so. Tuff is one of the best at uncovering smallcap gems. He was the smart money getting in very early in several stocks such as BOOM, HURC, FTK, NGPS, DXPE, BTJ, IIIN, etc.

I'll start with the weekly chart and then move to the daily chart.

American Science & Engineering, Inc. (Public, NASDAQ:ASEI)
IT looks to me like ASEI is in the process of consolidating a move to all time highs. They have pulling back very orderly and might be setting the first higher low here. The fact that they are slowing down near a previous resistance point may be signifying that this line will hold as support. Stochastics is starting to move off of oversold status and MACD is in a leading divergence. This all looks pretty decent to me at this point, but a lot depends on what happens to the overall market.


Here is the daily chart which may be showing that a bottom may be in. It has retraced 61.8% of the previous leg up and tested the trendline that was resistance as it traded in a falling wedge type base. It looks like it may move a little lower in the coming days and retest that area as support, but if it stops there and then turns back up, then it may offer a great risk reward setup.


Good Luck,




Joey

Friday was another day that started out strong and ended in a wimper. Although, most stocks came off their lows, the fact that they gapped and then did nothing shows there is still ample supply. At this point, it still looks like most equities are under distribution and another down leg is in order. V bottoms are pretty rare, and I am sticking with the probabilities that the recent lows will at least be tested. Although the hourly charts look like there may still be some room to the upside, I am staying away from initiating new longs (other then daytrades) because the indices have already bounced a little higher and remain comfortably below their 50sma's. With that in mind, I am adding the following short setups to my watchlist.

Satyam Computer (ADR) (Public, NYSE:SAY)
SAY had a pretty strong bounce higher after a large gap down. It is headed right into resistance and looks to be running out of steam. I would imagine that some of the dip buyers will be taking easy profits if the markets resume the slide.



Chunghwa Telecom Co., Ltd. (ADR) (Public, NYSE:CHT)
CHT looks like it rolled over and is now getting a dead cat bounce. While it may continue to the 20sma, it looks like there is plenty of downside left here.




Best Buy Co., Inc. (Public, NYSE:BBY)
BBY is the classic stock under distribution play. It seems like there are ample institutions getting out of BBY as it continues to meet waves of selling on every retrace higher. It had a nice bounce back into resistance last week, and may be ready to resume the downtrend.


Good Luck,


Joey