You can’t help but marvel at the resiliency of this market following the sharp V shaped recovery in the indices over the past 2 months.  Even during the first down week across the market, the pull back was fairly orderly, with a late day recovery on Friday keeping some key short term support intact (the 20 day moving averages of the S&P and Dow).  Then, right out of the gates this week we get a 3% rally, erasing much of last week’s pull back.  The action has prompted some analysts to compare the move to the 2003 rally which kicked off a 5 year bull market.  I think it’s way too soon to be making those kinds of comparisons but I have to admit that I’m not nearly as confident that this market will come close to re-testing the March lows as I was just a few weeks ago.  There are now several levels of considerable support that would need to breached to test those levels again.  In the shorter term, I remain considerably bearish and still think that at the very least this market needs to spend some time sideways before a meaningful rally above the 200 day moving averages can take place.  Let’s take a look at the charts.

Read Entire Post “Resiliency Remains As Market Works Off Overbought Conditions” Here

Week after week, it’s the same story.. market continues to push forward as the rally continues to show it’s beginning to crack with subtle clues. Although on Thursday the market revealed the most glaring indication yet that this rally will soon take a breather.  The Nasdaq hit its 200 day moving average right around 1750 and ultimately turned tail and reversed to the downside with heavier volume than the day before.  That is a failure at a major resistance level in a bear market.  I don’t think I need to say anymore .. but I will.  1750 also happens to be another major source of resistance of the 2004 low.  I know, some of you might be saying (especially if your Larry Kudlow) that the great banking crisis is over, possibly even an aberration.  Less than two months ago, the world was coming to an end and now all of sudden we’re out of the woods and into a bull market, heading to 10,000.  Ok, I know most of my readers don’t believe that but CNBC would certainly have you believe it.  I like to think that we’re somewhere in the middle. Yes, we quite possibly averted a major disaster in the economy, but I also don’t think you get a V shaped recovery in an economy that takes a mammoth hit to the jaw. 

Read Entire Post “Rally Continues To Tire As Nasdaq Hits 200 Day Moving Average” Here

Finding Stocks With Explosive Upside Potential Using FreeStockCharts.com

Below is a video presentation highlighting the new site from the Worden Brothers which provides free real time stock charts, watch lists and news at www.freestockcharts.com.  In my opinion, it’s the best free real time charting system available.  It’s a scaled down version of the their Telechart desktop program which I have been using for about 5 years now.  It certainly doesn’t have all the features the paid version does such as chat rooms, desktop/news alerts, filtering, custom scans, etc but it’s still a very useful tool and you can’t beat the price.  It’s FREE!

There is one feature in particular that I like to use to locate potentially explosive stocks and that is the Volume Buzz feature.  Hit the play button below and I’ll show you how I go about setting up my charts, setting up the Volume Buzz feature and locating stocks with explosive potential.

A few things to keep in mind which I discuss in the video as well:

- I avoid biotech stocks (too much risk)
- the lower priced the stock, the more the risk ( a .30 stock will carry more risk than a $5 stock)
- is the stock breaking out of a tight, quiet consolidation (good), or just moving within a sloppy pattern (bad)
- wait for your price (stochastics oversold on several time frames, at least 50% retracement)
- when is earnings?  earnings announcements create more risk and great volatility. I typically avoid holding speculative stocks through an earnings report
- don’t bite off more than you can chew.  Taking large positions in speculative positions will increase your fear and likely shake you out of the position before it has a chance to move big
- new to all this?  consider virtual trading for a few months and ASK QUESTIONS!  That’s what I’m here for.  Don’t be a fly on the wall. 
- If you put the time in and stay disciplined in your trades YOU WILL BE SUCCESSFUL.  Remember about 20% of traders are making 80% of the profits.  How many people do you think will watch this video all the way through, take notes, apply what they learn, ask questions and improve their trading skills?  You got it.. about 20% ..probably less than that.

NOTE: one thing I forgot to mention in this video is that it doesn’t refresh the volume buzz data automatically.  You need to hit the blue refresh button to the right of the column headers.

Enjoy the video! Click the play button below to view ::::: >>>
 

This week, I’ll keep it VERY brief with a short analysis of the charts.  As I mentioned in last week’s report, the market has shown signs of cracking up here, but going into next week bulls remain in control.  Just when it appears the market may follow through to the downside, buyers step into support this market. I thought there was a very good chance that traders would “sell the news” following the release of the stress test parameters but the market held in quite well all the way into the close.  The level I’ll be watching closely next week is that 875 level in the S&P which is an area of failure 3 times now.  Getting through there would be very bullish and signal a move to the 900 level.

The Nasdaq remains the most bullish of the major indices and continues to trade above that double bottom base breakout level around 1665.  I’ll be watching 1700 as potential resistance but that is really just minor psychological resistance.  It really looks like the Nasdaq wants to test that next major level of resistance around the 200 day moving average and November high around 1780 – 1800.  If we do hit that level, it would be a beauty of a spot to short this market with some aggression.

The laggard is the Dow and it continues to have trouble with that downward trend line off  the Nov, Jan and April highs.  It hit that line again on Friday  before pulling back.

To sum up, this market has certainly shown some signs of weakening, but considering the strength of tech right now I believe there is a 50/50 chance of vaulting another 5% or so before a more pronounced correction can begin.  Get those watch lists of short opportunities together now so you’ll be ready! 

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Isn’t Time You Took Control of Your Financial Future?

The Self Investors Model Portfolio wrapped up 2006 with a gain of 27.6%, 2007 with a gain of 30.2%, finished nearly 35% ahead of the S&P in a very difficult 2008 and is off to a good start here in 2009, ahead of the S&P YTD performance by 5%.  This is a REAL portfolio with position sizing and not based on extrapolated hypothetical gains for each trade.  On average it beats the S&P by 20% per year. The result?

* Putting $100K into an S&P tracking index at the beginning of 2004 and you’re down more than $20K. 
* The Self Investors Model in the same time period would have more than doubled your money.  That’s the power of not buying and holding! 

Would you like to receive buy and sell alerts in the Model Portfolio within minutes (NEW! now get them via instant messaging in near real time) of each transaction?  You can receive these along with ALL of the tracking tools and video reports with the very popular Gold membership.  Don’t delay, get started today and join me for many more market beating months here at SelfInvestors.com.

::: Best/Worst Performers :::

- Top 10 Performing Industries For the Week -

1. Textile Manufacturing: 22.45%
2. Resorts & Casinos: 17.80%
3. REIT – Hotel Motel: 16.95%
4. Silver: 13.60%
5. Paper & Paper Products:  12.35%
6. Office Supplies: 11.15%
7. Gold: 10.95%
8. Lumber & Wood Production: 10.60%
9. Hospitals: 10.00%
10. Small Tools & Accessories: 9.85%

- Top 10 Worst Performing Industries For the Week -

1. Research Services: -11.30%
2. Diagnostic Substances: -10.10%
3. Music & Video Stores: -9.60%
4. Farm Products: -8.75%
5. Surety & Title Insurance: -8.00%
6. Banks – Midwest: -6.75%
7. Copper: -6.40%
8. Banks – SE: -6.25%
9. Broadcasting Radio: -6.00%
10. Education & Training Services: -5.35%

- Top 5 Best Performing ETFs For the Week -
(excluding leveraged ETFs)

1. Market Vectors Gold Miners (GDX) 11.90%
2. iShares Silver (SLV) 8.50%
3. Claymore Global Timber (CUT) 8.25%
4. Central Fund of Canada (CEF) 7.70%
5. Market Vectors Nuclear Energy (NLR) 6.75%

- Worst 5 Performing ETF’s -

1. Herzfeld Caribbean Basin (CUBA) -16.05%
2. US Nat Gas (UNG) -12.80%
3. SPDR Series Trust (KBE) -7.55%
4. PowerShares Base Metals (DBB) -6.40%
5. SPDR Regional Banking (KRE) -4.95%

::: Upcoming Economic Reports (4/27/2009- 5/1/2009) :::

Monday:        None
Tuesday:       Consumer Confidence, Case/Shiller Home Price Index
Wednesday:  FOMC Rate Decision, GDP, Crude Inventories
Thursday:      Personal Income/Spending, Initial Claims, Chicago PMI
Friday:           Factory Orders, ISM Index, Auto/Truck Sales

::: Earnings I’m Watching This Week :::

Monday: Baidu.com (BIDU), BE Aerospace (BEAV), Compass Minerals (CMP), Grand Canyon Education (LOPE), Smith Intl (SII), Southwestern Energy (SWN), Tyler Technologies (TYL),

Tuesday: Amedisys (AMED),Deutsche Bank (DB), eHealth (EHTH), FPL Group (FPL), Icon (ICLR), Jacobs Engineering (JEC), Mead Johnson Nutrition (MJN), OptionsXpress (OXPS), Sociedad Quimica (SQM), Stericycle (SRCL), Vision China Media (VISN),

Wednesday: Akeena Solar (AKNS), China Offshore (CEO), First Solar (FSLR), Green Mountain Coffee (GMCR), Itron (ITRI), Rubicon (RBCN), Tetra Tech (TTEK), Trinity Industries (TRN), Visa (V),

Thursday: Athena Health (ATHN), Capella Education (CPLA), Compellant Technologies (CML), Comscore (SCOR),  Corinthian Colleges (COCO), Evergreen Solar (ESLR), Forrester Research (FORR), Genoptix (GXDX), Neutral Tandem (TNDM), SourceFire (FIRE), Strayer Education (STRA), TeleCommunication Systems (TSYS)

Friday: Flir Systems (FLIR), Mastercard (MA)

By Guest Author: Robert Williams, PhD, P.E.

The thrust of this industry perspective is to identify system supplier companies active in oil/gas process plants and to highlight their future earnings and charts for potential investment by our readers. The companies listed below are all international conglomerates that also provide process control systems for all the other industries as well. Therefore, their potential earnings are more dependent on the global economy rather than the oil/gas industry in particular.

Refineries, petro-chemical plants and all oil/gas processing facilities are extremely hazardous, i.e. explosive, processes because of the petroleum products and the very high pressures and temperatures involved in these processes. To this extent the industry has established stringent standards as to the safety of instrumented systems in order to protect personnel, environment and the process plant. In order to provide normal process control a distributed process control system (DCS) is engineered to provide central control of each process unit within the plant, e.g. refinery. In order to provide overall emergency shutdown of each process unit and the complete plant a safety instrumented system (SIS) is engineered for each unit. The SIS is a physically separate system from the DCS and generally utilizes dual or triple modular redundancy techniques to provide the extra reliability and availability in the event of process upset condition arising. Another process protection layer is provided by utilizing relief valves to relieve any high pressures that may arise during an upset condition.

Read Entire Post “Industry Perspective: Process Control Systems Suppliers” Here

United Health (UNH) Looks Poised To Take Another Leg Down .. 20% + Profits On the Horizon?
(click play button to start video)

Want 7 More Trade Ideas On the Short Side Right Away? 

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Everyone wants to know.. how long can the rally last.  It’s the same question that was being asked on the other side just one month ago.  How low can we go and for how long?  The market always seems to remain irrational longer than you think it will and that has certainly played out over the first quarter here in 2009.  To help answer these questions, I always turn to the charts to gauge areas of support/resistance as well institutional demand.  Admittedly, technical analysis has been considerably difficult in an environment of rumors, manipulation, intervention and extreme levels of fear and greed, but what it does and will always do well is provide an x-ray into the health or weakness of the market.  In general, slices through support and weakness at resistance indicates a deteriorating market while surges above resistance and at support indicate good market strength.

Market strength has certainly been on display over the past 6 weeks with 6 straight up weeks.  Strength was on display when the S&P easily moved above resistance at 750.  It was on display once again when the S&P moved quickly above resistance at 800 and again when it came back to find support at 800 and yet again when it took out the downward trend off the Oct and Jan highs around 840.  Now the S&P faces another test of its strength at 875 which is an area where it formed a double top in late January and early February.  Does the S&P have the kind of momentum now that it did back at 750 or 800? In a word – no.

Read Entire Post “Rally Shows a 2nd Crack, S&P Has Trouble At 875 But Bulls Remains In Control” Here

Over the past 9 months or so I’ve been trading in and out of gold using the leveraged double long ETN (DGP), adding positions on breakouts (or oversold conditions) and taking profits on overbought conditions.  In my opinion, the time is now to begin adding gold again.  Yeah I’m a bit concerned about all the talk about getting into gold (haha.. what timing! a goldline commercial just appeared on the tube), so it is a bit crowded and may need to consolidate some more, but I think the odds are very good for a run to $1000/oz and beyond in the coming months.

I first began trading DGP last summer and on June 16th, 2008 I told my premium members:

“My analysis is indicating that gold and silver is offering an initial entry point today by breaking out of downtrends and subsequently, bullish wedge formations.  This could be the beginning of another run in gold and silver over the next few months.  Entry at 21.16.”

::: >> (oh no, another gold commercial!)

One month later on July 15th, I locked in the 17% profit at 25.22 as DGP became very overbought. (see chart below)

Read Entire Post “Trading the DB Gold Double Long ETN (DGP)” Here

What week.  With the Fed throwing an unexpected hail mary pass at the credit crisis, the indices did indeed surge right into major resistance levels with a quick 20% move similar to what we say last October and November. 

An email I sent out to members on Thursday night sums up my thoughts for the week, so I’ll just post that…

“In my last email to you on Monday the market had just put in a high volume reversal day to the downside with significant volume.  It appeared this market needed to pull back a bit before making a serious run at the major resistance levels I’ve been talking about (Dow 7500, Nasdaq 1500 and S&P 800).  Ah, but the bulls still had some serious fight left in them.  The very next day, some morning weakness gave way to a flurry of late day buying and the indices took out the highs of the previous day.  Immediately taking out the highs of a high volume reversal day the very next day is a rare event and it signaled significant strength to this rally, setting the stage for a run into major resistance levels with little pause.  Admittedly I was caught of guard a bit so didn’t capitalize as well as I had hoped to on Tuesday and Wednesday.. such is trading.  You play the odds when they’re in your favor and accept the fact that perfection is far from possible. 

So what now?  Well, let’s start by muting those so called pros on CNBC waving the pom poms urging you to get into this market right now.  Yes, it’s possible the low of early March was “the” bottom but that won’t be revealed until well after the fact.  Let’s keep in mind that the market vaulted 20% in little more than one week, running smack into major resistance levels AND this is still a bear market.  Chasing this rally up here is a mistake.  Fearing missing a rally is just about as detrimental to your financial well being as panicking at bottoms, so the financial surgeon general says “you have been warned.” 

Read Entire Post “Gold & Silver Breakout As Indices Retreat From Resistance” Here