Friday was the first decent down day we have had in the market in well over a month. The dollar was strong and it caused some pain in the commodity space. Oil, materials and metals all underperformed.


I’m not sure if the SPY has put in a short term top and will roll over testing the 20 day MA (113.65) or if we are going to consolidate here below the highs for a few sessions and then push higher. Commodities say we are going lower but the financials and GS in particular are holding up just fine.

One of the tells I will be using to test the resiliency of the market is AAPL 220. When AAPL broke out through 220 back on March 9th it was on big volume and very convincing. This level has already been tested once (3/15) and the second test could tell us how much conviction the bulls have in this rally. This level is going to be on a lot of screens so keep an eye on it if we get there.

For tomorrow I have 5 breakout long ideas and 2 breakdown short ideas and 4 reversal/support ideas, more on those later. To be honest with you I am not expecting a lot of explosive action in the market tomorrow so treat the breakout/down levels as targets or as a place to fade the move after a false breakout/down.

I have found that buying on pull backs to important moving averages has been having some success and I have a few ideas that fit that profile. Remember that when buying a pullback you want a light volume vertical move to the MA. You do not want anything news driven or a heavy volume sector wide selloff. You want an over anxious sloppy seller chasing price coming vertical into a moving average. Ideally the level will be broken the seller is exhausted and the stock snaps right back up through your alert level. Then you have buyers on your side and a built in stop level at the bottom of that candle. But I caution you to only buy them after the level has been broken and it is trading back above the price. DO NOT TRY AND CATCH A FALLING KNIFE!!!! Also I only try this the first time around every time a level is tested the weaker it gets.

cat 60.5 long

de 60 long

dgx 58 long

jbl 18 long

gild 48 long

cmi 58 short

spwra 18.5 short

apa 98.35 reversal buy on 150 day

apc 67.7 reversal buy on 50 day

atw 33.04 reversal buy on 200 day

cnx 44.4 reversal buy on 200 day