SMALL PULLBACK

There is really no big change from yesterday's posting. The market pulled back a bit today, but most stocks held their support levels. The Gold Minors sector made a nice jump today. I'm close to making a call to get back into gold. Wait for some confirmation. GDX, NEM, and AEM are all just sitting below their 10 day MA. RGLD and ABX closed above their 10 day MA. I do like the latest pullback in these stocks. If they trade higher tomorrow, I would consider that confirmation. I would also classify this as a short term trade. I would look to take profits if they approach their recent highs. That's if they even give us confirmation tomorrow. IBM is sitting on its 50 day MA. I'll give it one more day to get back above $120...maybe two days if tomorrow looks promising. AAPL still looks okay. Most of the picks from yesterday still look okay.

HERE WE GO AGAIN!

Lately...every time the market snaps back from a sell off, it ends up going to a new high. If this pattern is going to continue, we need to get in soon...before it gets to a new high. I'm there with a lot of you...you just don't trust any moves higher. Although it has been hard to do, I am trusting this trend until it breaks...and I haven't seen it break yet. This was a nice rally off of support which was lead by the Financials, Energy, and Technology. GS, JPM, WFC, and PNC could be a nice short term play in Financials. CHK, APA, APC, NOV, KWK, HAL, XTO, RIG, and PQ in the Energy sector. I've liked the pattern on IBM lately, but it had a bad move down today after holding tough during the drops on Thursday and Friday of last week. If it can't get back above $120 in the next day or two, I would suggest walking away from that trade. AAPL is rebounding nicely. It is almost easy money when trading AAPL after a pull back. AMD looks good. Wait for SOHU to close above its 10 day moving average...that would be some nice confirmation. BIDU look like it will make another run. I still like HLTH if it can finally breakout! EQIX, GOOG, YHOO, and AMZN all look nice. Obviously, I'm expecting some follow through to this rally...that has been the pattern. Don't get crazy though. We still only want to risk a small about of our cash to play some of these moves. We'll take the extra money if the market wants to give it to us...but we won't position ourselves to get wiped out if it doesn't. Look to start selling portions of your positions when either the market, or individual stocks start to reach new highs. I must emphasize that this is a very short term outlook. We kick off earnings season in about two weeks and I think it could get brutal. This might be the last push...the suckers rally. We'll either be market suckers...or market spankers. Be a market spanker!

THIS SECTOR COULD RALLY BIG TIME

The markets continued to sell off today, but it was encouraging that the move down was lighter than the previous two days...and the volume was a bit lighter too. I still don't recommend any bullish positions until the market proves it is done falling. IBM continues to impress me as it holds that $120 support. Technology has been weak lately...but if we get an up day in the market, IBM could really take off. Also watch AAPL. If it holds support at its 10 day MA, it could start to move back up. It didn't really drop much on that RIMM news...at least not yet. I am also keeping a close eye on the Energy stocks. I still like natural gas...CHK, APA, and APC. Watch the developments arising from the Iran nuclear program. Go to your favorite news channel or read some articles to get up to date as to what is going on there. If this situation escalates, it could cause oil prices to go through the roof. You might need to make some money with some of these trades just to afford the gas for your car! I'm not saying to run out there and buy these stocks right now. These conflicts can last months before they escalate...if they end up escalating at all. If an uptrend is in place on some of these stocks, you should definitely look to buy into the trend. In other words, let the trend dictate the trading decision...like it always should. More than anything I want you to be prepared. If something happens, you'll be ready to go. Some of my favorite trends include NOV, DVN, EOG, KWK, CLR, HAL, and ATPG.

THIS IS GOOD!!!

We want this sell off. I'll repeat...we want this sell off. It has been hard to continue to buy into this trend. We want the market to pull back and give us some better trading opportunities. When stocks start to get too far away from their 50 day moving average (above or below it), they will begin to move back towards it. Many stocks have pulled back to this average over the last two days. We will wait to see if the 50 day MA holds as support for a lot of these stocks. For the S&P 500, we will look to see if the previous resistance of 1038 will hold as support. The VIX spiked up today, but closed just below its 50 day MA. Those are the things I will be watching for tomorrow. This sell off should not have caught you by surprise. I talked last week about the VIX hitting the support around 23 and all the divergences in the technical indicators. You could try to buy puts in this sell off, but the safer trade would be to wait until the sell off completes and look to buy back into these uptrends. I hope you listened to my recommendation to sell out of RIMM going into today's earnings announcement. RIMM is currently down over $12 in after hours trading. If you stayed in the trade and didn't take any profits, this move wiped out all your gains...and then some. IBM still looks very good. It closed up a bit today and it is holding support at that $120 price area. It is also sitting on its 10 day moving average. I still like natural gas, but wait for confirmation. I've soured a bit on the Homebuilders. I might come back to them if they breakout of this latest pullback. I still like BIDU and SOHU...but wait for confirmation.

REVERSAL!!

That was quite the reversal today. The DOW was up 87 before closing the day down 81. That is a 168 point move down from the intraday high! These types of intraday reversals usually have some follow through. I would expect the market to continue to move down a bit tomorrow. If we can hold at today's lows and rally up tomorrow, it would again signal the strength of the uptrend and you would want to buy into that type of move. I would like to see another drop like we had in the beginning of September and the middle part of August. This would create very nice buying opportunities and allow the market to adjust from its current overbought condition. Most of the patterns I gave you yesterday pulled back today...some more than others. If you got into any of those trades, make sure you have defined your risk (stop losses) in case the sell off continues. For those that didn't enter any of those patterns, keep those stocks in a watchlist and wait for confirmation before entering any trades. I like to use something like today's intraday high or today's opening price (whichever was higher). If the stocks are able to shake off today's move and rally above today's high, it will have reversed the sell off in one day. This (combined with the overall trend of the stocks) would indicate some nice confirmation to get into the trade. If these stocks continue to sell off in the next few days, you could start to look for new entry techniques using many of the ideas I taught you in the course. Try not to buy if these stocks keep falling. We don't know yet how far the correction will go. Keep an eye on the 10 day MA. We haven't been below it since the beginning of September. It could be an early signal as to the depth of this retracement. One quick note on RIMM. It has made a very nice move since it broke out of it's triangle pattern (about a $10 move). They are set to report earnings after the market close tomorrow (Thursday). You should consider getting out of most of your trade before the market closes. This stock could break in either direction after the earnings announcement is made. Why risk giving back a large chunk of your profits if it sells off after the announcement? Keep 1 or 2 contracts, but sell the rest. You option should have doubled or tripled on the $10 move it has already made. Remember the old Wall Street saying...Bulls make money. Bears make money. But pigs get slaughtered. Don't get too greedy.

JOIN THE "FOLLOWERS" SECTION

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BULL MARKET

Sorry for the lack of postings over the last few days. Not much had changed from my Wednesday (last week) posting so I figured I'd take a few days off. I'll try to make up for it today. Thank you for the success stories. Please keep those coming. It is the main reason why I do this blog. These stories help students see that this system does work. It also helps to motivate those that may not be putting in the necessary work to succeed. We are definitely in a bull market right now. Most of the traditional indicators have triggered. There are still some that want to wait for the Q3 earnings before they buy into it. We are nearing the next resistance area on the S&P 500 (around 1085 to 1100). There are a lot of nice patterns that I see out there. I will give you a rather long list of stocks to watch. I am tempted to encourage you to put more of your cash back into the market, but I am a big believer in Murphy's Law...it must be part of my Irish heritage. I know that as soon as I recommend you put more cash to work in the market, we will end up getting the big drop that I have been worried about over the last several weeks. Because of this, I won't be recommending that you put more cash to work in the market. I'm in a better position if you end up making less money than you could have...rather than losing more than you should. Before I start the new list, let's look at some of the past recommendations. I think CHK, APA, and APC still look great after their brief pull back. Those trends look like they will continue at least a bit longer. JRCC, BTU, MEE, and ANR have strong patterns in the coal sector. If SOHU stays above its 10 day MA and it gets back above today's opening price, there could be another entry into this trade if you missed the first one. IBM is also in a nice position for a new trade. Use a closing price below $120 as a stop loss. I still think if it holds $120 as support, it will take off from here...to at least $126. Any pull back on AAPL could be used as a reason to get in. It hasn't been pulling back much at all. I've noticed some very nice bullish ABC patterns in the Homebuilders sector. I like TOL, DHI, BZH, RYL, KBH, LEN, and PHM. Many of these patterns still need some confirmation, but a lot of them have pulled back to their 50 day MA and the 50 day MA is turning upward. I love the reward to risk in those types of trades. Other energy related stocks I like include DVN, NOV, EOG, CLR, HAL, DO, RIG, BEXP, ATPG, and CSIQ. In the Agricultural Chemical sector, I like MOS, AGU, and TRA. In the financials, I like the patterns on C and WFC. I also like several other financial stocks, but a lot of them need to pull back or retrace a bit before I would want to get in. I like the patterns on LVS and MGM in the Gaming sector. There is a nice triangle pattern on HLTH (wait for the breakout). I also like WDC, PMCS, ALTR, and INTC. Some stocks from my Market Trend Signal (www.markettrendsignal.com) scan include RDN, VCI, FUQI, JNY, ANN, SOA, SWKS, NTES, EJ, FFIV, ALK, and MDR. Make sure you use the trade management techniques I taught you in the course for some of these recommendations. I know there are a lot, but it has been about 5 days since I last posted. With the market pulling back a little, it has created some buying opportunities. Watch the market tomorrow. If we have any sort of sell off, wait for confirmation before entering any bullish trades. We don't want to buy while things are still falling. I like to buy when the stock is moving in my expected direction.