WAIT FOR MORE CONFIRMATION

The move up today was nice, but be careful about jumping in right here. Many stocks I'm watching rallied right to a resistance level...whether it was a 10 day moving average or a previous area of support now acting as resistance. Look at CHK and JRCC. Both rallied right to their 10 day MA, but did not close above it. BIDU closed right at a strong support/resistance area around $383. AAPL close right at the resistance trend line of its last correction. The S&P 500 rallied up to its support/resistance area of 1040. If you want to take a chance, then you could get in and hope it eventually breaks out above these resistance areas. I'm going to be more cautious given the negative news that has been coming out lately. I'm willing to wait for better confirmation in order to increase my trade probability. After the recent drop, I want stocks (and the market) to start breaking above resistance levels. We are at a resistance level, but we haven't yet broken above it. All the stocks I mentioned last week still look pretty good. Especially APA. This stock broke above the 8/24 high, its 10 day MA, and the resistance line of this last correction...all in one day. If you made you watchlists over the weekend, you had the chance to set up your trades tonight and wait for confirmation tomorrow. You could even have set up contingent orders for your trades if you won't be able to place them during market hours (for those new to the course, I'll be teaching that technique later on). I still think it's smart to keep a large cash position and only trade strong trending stocks that are giving good confirmation. Add financial stocks to the watchlist. Many of them moved back above their 50 day MA with today's move. GS is the leader of the group. I wouldn't chase today's move...but if it breaks out to a new high, I would be all over it. Also look at LVS, MGM, and WYNN. FCX, MDR, NOV, DVN, EOG, HAL, ATPG, BEXP, SOHU, WDC, JNY, ANN, but no IBM! I'm boycotting that pattern. Remember, many of these patterns need a bit more confirmation. We could drop 200 points tomorrow and you would be glad you were waiting for confirmation.