Weekly Watchlist 10/12

As this week gets rolling we have Columbus Day on monday which will give us a thin low volume trade as bond markets are closed. Never short a dull market is my rule for these days. Plus we are in a confirmed bull trend. As the markets ended last week near highs of Sept. they will likely take out the highs this week; but will they hold these new lofty levels? You can easily see a bearish reversal or a bull trap occur but I tend to think we eventually still go to 1120 in the SPX. This is the 50% retracement of the entire move down from Oct 07.

The earnings reports this week start off with INTC and JPM and then conclude with GS, GOOG, GE, C, BAC and others. It looks like the market is just waiting for these catalysts to perhaps make the next leg higher. On the other side we have the Euro testing recent highs above 1.48 and the direction of the dollar is still guiding this market in the short term. If the Euro breaks 1.485 and closes we have a move up to 1.51 possibly coming.

Upside potential is all about a close above 1080 in the SPX. Downside support remains and even if we see pullbacks you can see they are controlled selling and dip buyers step in.

The Watchlist:

Longs>> GRMN, HK, APOL, JOYG, BUCY, FSLR, OIH

Shorts>> TOL, PENN, LMT