AND THE NEXT MARKET MOVE IS....

The market has chopped back and forth for the last few trading days. It's been hard to see where it is going next. The bullish argument is that every time the market sells off a bit, the buyers come back in and push prices back up. The bearish argument is that the buyers haven't been able to push prices much higher and eventually they will lose confidence and the market will tumble. Today's move didn't really do much to improve either argument. I'm still minimizing my trades right now in case we make a big move...in either direction. I'm in mostly bullish positions because that is still the current trend, but I have minimized the size of those positions in case we get a 400 point drop (or something like that). I'll be watching the market open tomorrow. I wouldn't want to see a move below 925 on the S&P 500. If we break out above 950, the market could really start to move up. There has been a lot of consolidation over the last month which could lead to a big move up...if we can breakout above this range. I'm also watching the VIX very closely. It has been trying to break above the resistance at 31. If it can close above 31.50, I might begin to get more bearish again. If it drops below 28, the market could take off. Watch financials this week. They are still sitting on key levels and could make a nice pop. The financial stocks that showed up on my scan include JPM, PNC, WFC, C, and BX. I really like the chart of JPM (I mentioned this one last week). BX has a great Cup with Handle pattern and could have the biggest breakout. If you want to trade all the financial stocks together, look at FAS. I also like some of the gold stocks like SA and GOLD. A few other patterns that showed up on my scan include NILE, ONNN, and OVTI (I like the stock, not the option on this one). I would be cautious with the energy stocks right now. If the dollar starts to gain strength, it could drive energy prices down a bit. One of the reasons why the energy stocks had been performing well (without an increase in demand) was because of the falling dollar. A rising dollar could affect all commodity stocks...which includes gold so keep that in mind. You can use the UUP to follow the dollar.