Sunday, December 13, 2009

Weekly Watchlist 12/14

Stocks have held their own as the dollar rallied the past two weeks and commodities sold off fairly hard. The market seems to have leadership from transports and semi's along with some other tech. It has to be encouraging to see the market hang in this neutral range as the euro sells off the past few weeks. Maybe this is just the start of the dollar rallying with equities?

With the year end so close I find it hard to believe we sell off into a seasonal bullish time for stocks. FOMC meeting is this week along with quad witching expiration on Friday. There is plenty of open interest at the round number 1100 strike in the SPX options so it would not surprise me to see another rather flat week overall. At this point I would be more willing to be bullishly neutral. Which I guess means expecting a break of the highs but respecting the range.

The euro does look likely to test the 1.45 mark this week and gold has room down to 1080 which is the next major support level. The last month has seen different sectors lead at different times. One week tech leads and commodities lag, then the next week banks lag and transports lead. Until we can get a broad based rally then this rangebound trading may hold into year end. One thing for certain is that we have longer term resistance doing what it should do at these levels on the weekly charts. 1125 SPX is going to give us a hard time until it doesn't.

Buy the dips>> GD, M, TIE, ICE, HD, GVA, IYR, SLM

Sell the rips>> RIG, FXE

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