Bankin On It.. Or Not.

As I prepare for tomorrow’s opening bell, I can’t help but notice that a lot of bank stocks are setup for a technical breakout.  I haven’t been watching the news, so I’m not sure what’s going on in the financials, but I live by the charts – and those charts tell me to get ready for moves this week.  Of course, anything can happen – the breakout could be down or up.  The only thing I can do is be prepared just in case the bull breakout does happen (I will likely not play a breakdown).  NOTE: Right now the financials are falling asleep with losing interest from traders on decreasing volatility (the trades have been in biotech lately).  I’m preparing fro the traders to come back to the banks – they will soon – I’m banking on it, or not.

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Tags: BAC, BBT, C, FITB, HBAN, RF, WFC

Time to Make a Deposit

I’m betting that tomorrow will be a good day to put money into financial stocks for a quick scalp on an afternoon bull move. Yup, I said bull move tomorrow. Don’t get me wrong, I think we’re deeply entrenched in a bear market, so any move to the upside is not likely to last very long. Last Monday, I correctly called the bottom in financials for the week and looked for 4 up days.  We got it and have since retracted back down below last Monday’s levels. Time to move up again?

The way I’m playing Tuesday financials:

• First, and foremost, limit the focus to those with the largest downturns over the last few days. So, I’m only looking at FAS, C, WFC, and BAC. Keepin it simple.
• Next move is to watch the futures. As I type, the DOW, NASDAQ and S&P 500 are all up slightly. A quick glance at China shows a mid day recovery off the open gap-down.
• Third is to look at the chart and possible entry point.  For me, I like to look at the 5 minute chart and wait for EMA4 to cross up through EMA13.  This gives me a buy signal (supporting narrow and opening bollinger bands help)… not to mention, volume, volume, volume.

Check out the BAC chart for more on why I like financials up tomorrow: (click to enlarge).  I could also be completely wrong

BAC Daily

Tags: BAC, C, FAS, WFC

Frisky Friday

Some Thursday night opinions:

• Hard to imagine financial sustaining this upward move on Friday. Monday night, I offered my opinion on FAS, BAC, and C.  It looked we were at a temporary bottom and a little bounce was due – way too oversold, too quickly. However, a look at the chart shows a few ominous signs for the this group tomorrow.
  • The candles show a pressure to sell and possible direction change.
  • BAC, and C are all at the top of their trading channels. Might be some short interest in these Friday.
  • FAS hit against EMA13 and turned south.. not bullish. C has struggled two days in a row and still hasn’t made it through EMA13.
  • quick note… I mentioned Monday night that FAS might make it as high as $7 this week.  Well, I think it needed to happen today. $7 is the bottom of the gap-fill, so if it does happen, a quick run to $7.5 is likely.
• I called the colapse in gold this week (corresponds with the run in financials).  However, with financials testing resistance (failed today) and GLD possibly at support levels around $92, I believe it is time to eyeball this one again.  A fall heavy through $92 might offer a short, but my guess is a short-term long position might be in order if the market is unable to hold.
• I fear for the $SPX">SPX… it is that elephant in the room that traders are watching with their finger on the ‘go short’ button.  If we fall through that, time to go the fear route – in other words – gold.  We will know in the next couple of days – even possibly tomorrow – a test of 741 is likely.
• I really wish i would have held on to AMAT . I had it played right.. just exited too soon.
• I think DIG anywhere near $20 is a good buy (but not below).
• CLR, one of my favorite trades, is off to the races again.  Will need oil support.  DXO is another enjoyable oil play.
• A little consolidation in MBT – watching.
• ACS – bottom of channel with strong volume
• NDN – EMA4 crossing EMA13.  $8.5 resistance.
• If gold moves, GG looks interesting.
• RAH – another bottom of the channel stocks – can play long or short depending on the move.
• NFLX is holding on for dear life – looks like a short possibility to me.

Chart of the Day

Tags: ACS, AMAT, BAC, C, CLR, DIG, DXO, FAS, GG, GLD, MBT, NDN, NFLX, RAH, SPX

I’m Calling Bottom

I’ve decided to call bottom in the financial market this week (only for this week). Why? Gut. News. Chart. I’m loco? Who knows. It is a combination of things. Please don’t take my word on it… opinion only.

Why:

First - human attention span. The average adult can only focus on one thought for about 15 minutes, or 3 days or 6 days, etc.  If you’re heard that things happen in 3, well they often do.  It seems to me that 15 is the real number, not ‘3′… but 15 is three 5s.  Anyway, I digress.

How 3 applies to the stock market (again, just me playing with some theory tonight – I have no proof):

It is rare that trends last more than 3 or 6 or 9 days consecutively without some kind of interruption (loss of attention). OK, but what happens if there are nervous investors (heavy volume in the trade)?  We’ll let’s take it down by a third.  So, 9 becomes 6, 6 days becomes 4 1/2 and 3 becomes 2.

Let’s apply that mess to BAC dating back to the noticeable decline in November. Check out daily of BAC.  Applying this to DOW seemed to work, too.

Second – Traders tend to hold on to bad assets longer than good assets. Meaning, bad news in a market usually takes 3-6 days to take out all of the sellers. This downward spiral often ends in a massive sell-off. People hate experiencing pain, so selling – even at a loss, is a last resort. We’re more likely to sell a stock on the way up than down.  Friday experienced the massive volume that often triggers a reversal.

Third – What other bad news could come out concerning financials?  As I see it, the bad news is out there – people have talked about nationalization and everyone knows the issues every bank is dealing with. Now it is time for decisions.  Decisions make investors happy.  I think we’re getting past the death spiral and into the “ok, I realize now that everything is horrible and I’ve caught my breathe.  Let’s fix the problem”.

Few bold predictions for the rest of the week:

• FAS to $6, possibly $7.
• Gold will freak out and pull back.
• I will catch up on sleep
• VIX will significantly calm down.

disclaimer

Tags: BAC, FAS

My Monday Market Watch

Last week was all out wacky as financials got destroyed and investors ran to the comforts of gold.  The sky is falling! Well, not like.  However, last week was evidence that we are experiencing some very real issues in our economy and the general public is panicking at every opportunity to do so.

The question now is if the reverse will happen. Often times, bear markets are interrupted by quick and substantial bull moves.  This week, maybe?  After taking out November lows during lunch on Friday, the trading world calmed down and actually showed some sings of bottoming.  This is not to say that we’re definitely there, but maybe it is bull rally time (Mon – Tues).

So, if the bull does wake up tomorrow, here is what I will likely participate in:

DZZ – Back on Feb. 9th, I made a an incorrect call with GLD. I assumed that we were going to retest the mid 80s  before heading back up.  Not only did GLD not test 86, it is now attempting to test $100.  HOWEVER, I’m back to say that I think gold has found a temporary ceiling and unless Obama announces nationalization of banks, I think DZZ is in play for Monday/Tuesday.  WSJ video

FAS – My buddy FAS.  I’m looking for a strong bounce back up early this week in the financials – BAC, WFC, and C will likely lead the way and FAS is my leverage.  Great intraday play, but extremely risky to go to bed with.

Scan results (possible long in the morning):

CHCO – (thanks @tickerville)

NEM – IF continued gold move

AMAT – bottom of channel reversal – target $10.55

DV if it holds $52 support levels.

CLR – runs well when oil moves up.

SWIM over $8.5

HLTH – over $12 – might struggle with $12.5, however.

BRCD support at $3.

Tags: AMAT, BAC, BRCD, C, CHCO, CLR, DV, DZZ, FAS, GLD, HLTH, NEM, SWIM, WFC