Market Overview

Keep Riding the Fed Rally

Can't fight the FED.

 

Despite the employment figures and overall stagnant consumer confidence numbers, the equity market continues its relentless march up.  Traders actually liked the bad news now that the odds of QE2 becoming a reality has increased – So, everyone is continuing to trade the story – the Fed won't dare let the market drop (don't worry about that dollar thing).

 

It's not just the individuals and hedge funds who are participating in this rally.  Thanks to the Fed's endless  T-bill buying and money printing, all the big players (ie. Goldman Sachs (GS 152.66 ↑1.03%))  are flush with cash and able to put riskier asset trades (POMO at work) on their books.  It will be interesting to see if a battle breaks out between Fed intervention and earnings numbers over the next few weeks.  If earnings are not so rosy, the Fed will have to work even harder to promote the illusion of happiness. Elections are just a month away ;)

 

It's hard to say where we'll go, but let's just play what's give us, shall we?  The trend is still up, so I'm looking for long setups for Monday.  Shorts will present themselves if the market turns, but I'm focusing on the kool-aid train… and I'm going to drink it up.

 

Here are a few stocks I'm watching for swing long entries (I'll post my scalps and momo watch list later this weekend on Bullon.ws).


ISLN  (26.14 ↑3.98%) – this chart is hot… look at the history of consolidation, then move up.. we're there again.  A move over horizontal resistance here with MACD positive cross will bring in more swing buyers.


click to enlarge

 

WYNN  (93.85 ↑5.14%) – inside rising wedge.  has energy.  would like to see a small pullback and then stay in the swing as long as bottom trendline of the wedge holds support.

 

RVBD  (44.19 ↑2.24%) – Nice job holding $42.  An entry long above this horizontal support level sets up nicely for a swing with stop just under $42 and above SMA50.

 

CAT  (80.37 ↑2.07%) – as long as it holds above $80, buyers will likely come in.  That would probably be the swing stop spot for short term traders..

 

LFL  (29.74 ↑0.47%) – I'm going to wait for a move above $30 before considering this ascending triangle long.  Right now, it's just chilling.

 

JASO  (9.10 ↓-4.11%) over 9.5 would confirm continuation of swing long and possible entry. Stop just below.

 

I'll have a pile more later this weekend on bullson.ws

 

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