WAS JUNE 15 RALLY FOR REAL, OR WAS IT FIBONACCI RETRACEMENT?
Answer:
Tomorrow is line of demarcation for next leg up or next leg down. The proof is in the pudding and the details of the numbers.
As for today's market closing numbers, it was a mixed bag for bulls and bears.
These are ideas for long or short going forward off of tomorrows #'s.
For the BULLS:
1) SOX is white-hot and MOT is in roll reversal with INTC as heavy hitter in SOX. These two companies trade places and play musical chairs every three to four years and if market is going to run tomorrow and eventual new highs MOT is off to 120 and beyond. No new highs for market and complete market breakdown beneath 200 dma supports and this stock is a steal below 72 on a severe wash-out play. LSI also very strong.
2) CWX (Computer Software)our new baby addition to the MITA family. CWX (compliments of JL1HA1). Again, if the market runs, look at CA and ADBE and of course king kong MSFT. ERTS is poised too. If market futures is down hard prior to out of box wait till dust settles for first hour. Need to see where supports hold-- if they hold.
3)NWX(Networking) cwx cousin baby is strong. Long ideas if market breaks out are NT has had nice pullback here and is poised to run. TLAB, ALA must be in core hold. giant CSCO, and for buy out or undervalued buy and hold COMS is ripe. No long positions yet if market has distaste of CPI #.
4)XOI is red hot and one day from break-out. This could be bad omen for bulls but these stocks should out-perform in a down market. RD, AHC and even COC. XON and CHV in XOI, Dow 30 also is double play and these will run if market is to hit new highs.
5)Beaten Down Stocks in DRG like PFE, LLY, AHP and WLA. NUT Stocks like CMGI, AOL, BRCM
All Long Ideas and Bets temporarily off until dust settles with bad CPI report.
For the BEARS:
1)One of the easiest ways to play this for long term or retirement accounts is through indexes. For my clients, I utilize the Conseco Rydex Variable Annuity. You can short the NDX 100, the SPX 500 and the TYX 30 yr long bond. You can also go long these same indices. Let me know if you need help.
2)RUT is holding critical 832.50. The premiums in this option index are extremely steep.
3)TOB is relatively strong. I like MO in here and on any pull-back.
4)CRX Commodity Related Equity Index. BHI Baker Hughes is a must now. Good momentum and relative strength also, AHC again a double play. SLB and ARC.
5)Out of the money puts on a lock limit down market and/or bad cpi report where indexes are breaking critical supports.
6) Notice VIX is getting dangerously close to our numbers:
We closed at 28.23 today June 15; this post was Thursday June 10:
< VIX INDEX is popping up much higher this morning. This index is an early indicator of market trend changes. We have established two day support at 23.45 and 23.47 June 4 and June 7. Two day close below this level and market reverses back up. Resistance is at 28.70. TWO CLOSES ABOVE 29.66 AND THIS CORRECTION ACCELERATES DRAMATICALLY. >
Long or short, the fireworks are going to fly the next three days.
Best, J.T.
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