I’m sorry I haven’t been doing much posting lately, but I have been doing some other work and it has been taking up all of my time. Besides the market has been stuck in a range and the action has been pretty choppy. Until it gets resolved we are stuck with this choppy action.


Last week I wrote that we have a minor range in the SPY of $110/106. Both of those levels were tested and the question is where we go from here. My belief is higher, because we have finally closed above the 50 day MA (108.66) but the SPY has got a lot of work to do to get above the 200 day(111.54) & 150 day(112.40) MA’s.

We are deep in the heart of earnings season and the numbers have been well received for the most part but be aware of when companies are going to report especially if you are going to swing anything. The economic calendar is light tomorrow (new home sales at 10:00) so I don’t think it is really going to be a factor. What I will be watching is the dollar index ($DXY) to see if it continues to hold up above the 150 day MA (82.06) or if it rolls over and begins a test of the 200 day MA (80.50). If that happens we may get a nice bid to the market. The other market tells for me will be USO & SMH. There aren’t any clean levels on them but they both have been consolidating in a range since May and look like they may want to try and break out this week. I will be watching the $36 level on USO and the $29 level on SMH. Hopefully the action in these two ETF’s will give us a sense of where the broader market may be headed. Can they break out of this range or do they fail at the top of the range. Only time will tell.

The following ideas maybe actionable early this week, but watch for failed breakouts and break downs this has been a very choppy range bound market.

acm 25 long

aro 31 long

lstr 42 long

cmi 78 long

cmp 78 long

epd 29 long

fslr 140 long

sid 17 long

uhs 34.02 reversal/support buy on 200 day MA

wmt 53ish reversal short on 150+200 day MA

cf 85.32 reversal short on 200 day MA

The inability of the SPY to break out above the $110 level last week and then Friday’s brutal selloff really took some life out of the market. It is very choppy out there right and I have only a hand full of alerts for tomorrow. Sorry they are either there or they are not.


It looks like there is range forming in the SPY $110/$106, it is minor but keep an eye on it.

The following ideas maybe actionable tomorrow, but don’t press.

aapl 231.74 reversal/support buy on 150 day MA

deck 42.42 reversal/support buy on 150 day MA

prgo 52.63 reversal/support buy on 150 day MA

pxd 55.94 reversal/support buy on 150 day MA

rost 51.2 reversal/support buy on 150 day MA

rah 54 short

The SPY continues to be very choppy around the 50 day MA, but it is hold the gap up and that is good. Consolidating the move for a couple of days before moving higher is nice healthy action. With that said I saw a couple of things today make me think a gap fill back down to the 20 day MA/108 on the SPY is not out of the question.


1. There was a nice move up in LQD on very heavy volume. (LQD is the ETF for the investment grade bond index and represents an appetite for less risk.)

2. SMH put in an ugly red candle right at resistance and it is going to take some work to get through that.

I wrote earlier in the week about using C & GS as tells for where this market may be headed. C triggered and has basically done nothing while GS is still hanging around the top of the range. It may be easier to watch the $15 level on XLF; it is a clean level and coincides with the 150 day MA. JPM reports Thursday and should help resolve this level.

I only have a few alerts for tonight so don’t press until we get some clarity from the earnings. Also keep in mind that alert levels have been acting like targets and we have been getting weak break outs at some of these spots. So don’t be afraid to try a trade to the alert level or a resistance short on a failed breakout, especially if it is extended away from a base or EMA.

The following ideas may be actionable tomorrow:

ato 29 long

cog 34 long

lstr 42 long

mon 55 long

pot 95 long

bcr 80 long

amsc 30 long

Much has been made of the rally in the markets last week and I am not going to ignore it but you can’t ignore the lack of volume and the fact that earnings season kicks off tomorrow afternoon. It felt like one big short squeeze to me. We are definitely off the lows and out of the real danger zone but the SPY stopped right at the 20 day MA and AAPL is still below the 20 day MA so I wouldn’t exactly consider this a rip roaring bull market just yet.


AA kicks off earnings season tomorrow afternoon and with that in mind I am not expecting much from this market until we get some clarity on the earnings front. As you look to left on almost any daily chart you are going to see a lot of congestion. This market has a great amount of work to do if it want s to go higher.

There are three market tells I want you to watch in the next day or two that may give a sense of where the market is headed. AAPL, GS and C are pretty high profile names and may tell the tale of the market.

AAPL arguably is the leader of the market and should be on your radar screens at all times even if you are not trading it. He is still below the 20 day MA (261.39) and just above the 50 day MA (256.49). Simply put, watch what happens at these levels is it breaking out, being rejected chopping around? This may give you a good sense of what the broader market is going to do.

GS is just below the 50 day MA (139.81) and the top of a range roughly $140. Watch the reaction at that $140 level.

The last one I want you to watch is C. There is not a clean level on this one, but above 4.10 C looks like it wants to break out of a range that goes back to the middle of May.

This obviously isn’t perfect but I think these stocks may give us a sense of where the market is headed and they should be closely monitored until these levels are resolved.

The following ideas may be actionable tomorrow but I am expecting very little tomorrow so don’t push it.

brk.b 80 long


cf 75 long

ipi 23.38 reversal/short sale on 50 day MA

pru 58.18 reversal/short sale on 50 day MA

pxd 63.59 reversal/short sale on 50 day MA

qcom 35.63 reversal/short sale on 50 day MA

scco 31.49 reversal/short sale on 200 day MA

slb 60.41 reversal/short sale on 50 day MA

spg 85.49 reversal/short sale on 50 day MA

swn 39.98 reversal/short sale on 50 day MA

trw 30.45 reversal/short sale on 50 day MA

wlt 71.2 reversal/short sale on 50 day MA

The rally in the last three has been good and like I said couldn’t have come at a better time. Another failed rally would have been very dispiriting to the bulls. For the sale of my 401k and kids college fund I am happy to see the rally, but I don’t think we are out of the woods yet and I am concerned that if we can’t clear the moving averages and congestion above that in the next couple of weeks we are going to have yet another lower high and a failed breakout. Only time will tell. With that in mind I am going to be looking to short these rallies at MA’s and prior support levels.


The following ideas maybe actionable tomorrow but take it easy on a Friday in July.

aci 22.44 reversal/support short on 50 day MA

acm 23.9 reversal/support short on 20 day MA

apol 45.94 reversal/support short on 20 day MA

asia 25.17 reversal/support short on 200 day MA

atw 28.31 reversal/support short on 50 day MA

bbt 28.66 reversal/support short on 20&200 day MA

bmc 36.91 reversal/support short on 50 day MA

ccj 23.54 reversal/support short on 50 day MA

cern 81.75ish reversal/support short on 50&200 day MA

dow 26.58 reversal/support short on 50 day MA

drq 50.82 reversal/support short on 50 day MA

dvn 65.25ish reversal/support short on 20&50 day MA

flr 46.83 reversal/support short on 50 day MA

ge 36.65 reversal/support short on 50 day MA

gs 140.19 reversal/support short on 50 day MA

gww 104.39 reversal/support short on 50 day MA

ir 35.31 reversal/support short on 200 day MA

lstr 41.87 reversal/support short on 50 day MA

mee 32.13 reversal/support short on 50 day MA

met 40.8 reversal/support short on 50 day MA

mfe 32.78 reversal/support short on 50 day MA

mon 52.71 reversal/support short on 50 day MA

oii 50.81 reversal/support short on 50 day MA

oxy 82ish reversal/support short on multiple MA's

slb 60.66 reversal/support short on 50 day MA

sohu 44.07 reversal/support short on 50 day MA

spg 85.59 reversal/support short on 50 day MA

swn 40.04 reversal/support short on 50 day MA

sid 16 long

We finally got the oversold bounce so many bulls were looking for and it could not have come at a better time. I think another failed rally would have been very damaging to the bull camp. It was a nice broad based rally, I have 271 stocks on my WL 262 of them were up. The only fly in the ointment was the light volume but that has not seemed to matter lately, besides its summer.


The canary in the coal mine for this rally was the weakness in the dollar. I wrote the other day the dollar index was testing support at 84 and when it finally broke down through it this afternoon the market really took off. You can see it here in these two charts.

The charts are still pretty messy so there are no good bullish break out charts yet just some resistance shorts. I think the best case scenario for the bulls would be a day or two of consolidation and then a move higher. That would also set up some nice spots for us as well.

The following ideas may be actionable tomorrow but they are mostly resistance shorts. Let one or two pass, if they are not working then aside and don’t try a resistance short the second time around. Remember on a resistance short you want the stock extended away from any kind of base or the 5 minute EMA with a stop above the reversal candle.

do 67.22 reversal/resistance short on the 50 day MA

eog 105.79 reversal/resistance short on the 20 day MA

fast 52.04 reversal/resistance short on the 20&50 day MA

fcx 66.93 reversal/resistance short on the 50 day MA

ip 24ish reversal/resistance short on the 20&50 day MA

pnra 71.05 reversal/support buy on 200 day ma


prgo 51.7 reversal/support buy on 150 day ma

My opinion of the market has not changed since yesterday. The bears are still firmly in control of the market. A selloff in the dollar index and a rally in commodities and riskier sectors like the emerging markets were not enough to prevent this afternoon’s selloff. These strong opens that fade throughout the day have got to start becoming disheartening to the bulls.


Today’s high in the SPY 104.37 is only .01 away from the low put in when we established the last range back on 5/25 (SPY$104.38). Prior support has now become resistance. This market is respecting technicals so know your levels.

Until we can breakout and close above SPY $104 or breakdown below Thursday lows (SPY $101ish) things will remain pretty choppy. So don’t press and try to stay cool.

The following ideas may be actionable tomorrow:

alb 38.42 reversal/support buy on 200 day MA


deck 41.57 reversal/support buy on 150 day MA

fast 47.3 reversal/support buy on 150 day MA

mcd 64.39 reversal/support buy on 200 day MA

netl 25.55 reversal/support buy on 200 day MA

pnra 70.97 reversal/support buy on 200 day MA

pxd 54.77 reversal/support buy on 150 day MA

tii 17.29 reversal/support buy on 200 day MA

trw 25.48 reversal/support buy on 200 day MA

vrsn 25.03 reversal/support buy on 200 day MA

wfmi 33.26 reversal/support buy on 200 day MA

wynn 71.44 reversal/support buy on 200 day MA

adp 39 short

bke 31 short

whr 82 short

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.”


Happy Birthday America.

SPY $104 was major support and truthfully I expected more panic to set in when we broke it. But the market is in such an oversold condition that the selloffs have been pretty sloppy. Never the less we have broken through major support, the next support levels that I see are down around SPY $100 and then $95. In short the recent lows, Thursday, need to hold or we are likely headed lower.

The only real contra indicator I have seen is the weakness in the Dollar index. The DXY is back below the 20 & 50 day MA , for the first time since April and is testing support down around $84. In the recent past dollar weakness has meant higher equities.

Last week provided some excellent examples of my style of trading and I would like to share them with you.

On Thursday CSX had a text book breakdown at $48. If you look on the daily chart you will see where CSX tested the $48 level back on May 21st, 25th, June 8th and then again on July 1st. CSX opened Friday up above $49 and proceed to sell off all morning. It based nice above $48 testing it three times before finally breaking through around lunch time. Once breaking down through it never gave you a reason to be stopped out. An argument can be made that there was a better entry up around $48.50 on the second test of that level but either way it was a pain free trade.

The other examples are reversal/support buys on an important moving average. The first example is EOG which had a nice bounce off of the 200 day MA ($96) on Thursday. Note the vertical move into the MA on no news and moderate volume. EOG then puts in a low below $96 ($95.78) providing us with a built in stop, and reverses nicely. If executed properly you would have risked about .25 to make $3. Not a bad risk reward.

The other example was in HMIN on Thursday as well. It had a nice bounce off of the 50 day MA ($37). Again notice the vertical move into the support level on no news and moderate volume. In this case the spot to buy the stock was right on the number (37 was the low of the day) but the bars of volume at the level were your tell that this was the spot to get in. This one was more difficult to catch but if nothing else it goes to show the importance of these levels.

There is going to be a lot of people on vacation this week and we have a light economic calendar so I am not expecting too much action early in the week, but keep an eye on Thursday’s lows. If we start to break down below them things could get interesting.

The following ideas could be actionable early this week.

cmi 59.67 reversal/support buy on 150 day MA

ctsh 46.96 reversal/support buy on 200 day MA

fast 47.22 reversal/support buy on 150 day MA

fnsr 12.96 reversal/support buy on 150 day MA

netl 25.52 reversal/support buy on 200 day MA

pxd 54.66 reversal/support buy on 150 day MA

sbux 23.43 reversal/support buy on 200 day MA

tii 17.28 reversal/support buy on 200 day MA

trw 25.44 reversal/support buy on 200 day MA

uhs 34.69 reversal/support buy on 150 day MA

vrsn 25.02 reversal/support buy on 200 day MA

wfmi 33.23 reversal/support buy on 200 day MA

wll 73.12 reversal/support buy on 200 day MA

wynn 71.41 reversal/support buy on 200 day MA

dhr 36 short

esrx 45 short

intu 34 short

ir 33 short

rah 54 short

rax 17 short

shld 62 short

sohu 40 short

iwm 59 short

iyr 46 short

kre 22 short

hsp 58 long