Sunday, November 1, 2009

Weekly Watchlist 11/2

Going into November the markets are coming off a very tough week. 1100 SPX seems to be a top for now and last week proved that the selling was different than prior selloffs. Volatility is back with the VIX popping to 30 on friday. For the time being it seems like we should test further downside support in the SPX. The 50 day ema was broken and the SPX lows from last month at 1020 are next support. Below that and I think you can expect to see 987-1000 eventually which is just about where the 200 day ema sits.

The RUT and SOX have led the way lower as they failed to make new highs with the SPX and Dow and formed double tops. That is a pretty bearish sign when key sectors like the Semis and Small Caps show negative divergence like that. And of course the dollar stayed strong into friday and put pressure on commodities and stocks. If the dollar sustains this level or higher for a few more days it will make dollar bears cover their shorts and you can see some additional pressure on stocks.

FOMC rate decision this week and jobs report on friday will be what everyone is watching. Just watch the charts and price action to see what to expect. All in all, I think for the coming weeks you need to be selling longs into rallies and trying to approach the short side of the market to play the downside expecting at least a bit more volatility.

It's really tough to see any good swing trades setting up here at these levels and earnings season still here.


Buy the Dips>> RDY

Sell the Rips>> FDX, PRU, HON, KRE, RIMM

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