I wanted to make some quick comments on the markets and more importantly where I believe the attention "might" be in the upcoming week. This rotational correction continues to wreck havoc on prices. AT THIS STAGE of the game I believe what we've seen is an overall corrective phase within a major bull market.
In the past week I have expanded the universe of stocks that I follow. Stocks like RIMM, which I pointed out last week as a possible short ($118), are new to me. My approach here is to look at each company as a piece of a larger puzzle. The more pieces of the puzzle in place, hopefully, the clearer the overall picture becomes. In the case of RIMM, I tried to be as specific as possible, pointing to a possible move to the high 90's by the end of the month. The stock closed on Fri. at 96.25. With two days left in the month, and the way the overall pattern looks right now, its crunch time for this stock. Same thing applies to GILD, another stock pointed out (short) on Thursday. Its price dropped almost $10 by Fri. and could continue to get creamed (this week) if it doesn't soon stage a comeback. Now take a look at NETE with its expanding topping formation. It is trying to break into an all time high on a foundation that is USUALLY indicating a reversal is close at hand. Could be another great short. I am pointing these stocks out because I believe there are still excesses to be weeded out of the market. What this means to an overall COMPX sitting right at its longterm support is probably something we are all going to find out in the month of November. Let me finish by pointing out some of stocks that technically could make their way into the news:
CSCO and QCOM could both be stocks of the week. Both have prices sitting at critical areas. QCOM has been trying to break out of a tentative base that could easily reverse itself on bad news. Prices are probably going to attempt to breakout of a H&S on a daily chart. Could get blindsided by bad news. Qtryly comes out some time this week. CSCO has also been beaten down to a "do or die" point on the chart. The price began to weaken at the end of day on Friday at the hint of some "rumors" being spread on the street (ya gotta love W.S.) - potential downgrading by some firm. Downside target would be $40 area. I believe these two stocks could set off the domino effect for the rest of the market depending on which way they break.
The DOW is running into heavy resistance. Any breakdown in the COMPX would almost guarantee a retest of the old lows; Stocks like AMZN, ARBA, CMRC, JDSU, BRCM are facing heavy resistance as well. Any serious push in these stocks with volume I would view as positive overall. RMBS could also be another story stock next month. If the COMPX breaks down, RMBS could hit $20's by year end.
Like I said CSCO and QCOM could be the catalysts. Their actions should lead the way for the market as a whole.
Just some thoughts.
Good trading.
SO |
