Chart of the day

The Biotech SPDR ETF is rejecting the head and shoulders topping pattern that has formed over the entire fall.  A huge rip isn't a guarantee until the September highs are taken out, but with the clear RSI and relative strength resistance breaks, the odds are definitely in favor of a strong move higher.

Some stocks in the group of note:  ENDP, NPSP, INSM, BCRX, ALNY, IRIX, ILMN, PODD, CBST, HALO, STAA, ACOR

New Investment Idea: ACOR

Accorda Therapeutics has two big things going for it piquing my interest.

First, a nice long term chart is shaping up here.  It's based for the better part of 7 years now with a base range from 18-40.  It's recently formed a falling wedge pattern over the previous 6-7 months after testing all time highs this spring.  A break above the wedge sets this thing up nicely for a test of all time highs and potentially a monster run to the 60's and beyond. 

Accorda has a real interesting and deep product pipeline.  They have three potentially real powerful drugs here that could multiply their market cap.  Check out this video of  the company's founder Ron Cohen and his recent appeared on Mad Money

12/9/13 update: nothing has taken place that changes our view, but this needs more time.

Financials re-added to the top industry groups list

The financials have really proven themselves over the last ten trading days or so.  Let's start with the clear leader of the group JP Morgan.  

Remember how America completely trolled #askjpm for two days last week?  Well the folks at JP are getting the last laugh, and they'll be laughing for awhile.  

There was a 6 month head and shoulders top in place, that has failed to materialize to the downside.  Last week JPM broke resistance and has already cleared to new 52 week highs.  This is clearly THE leader of the group.

Now lets look at XLF itself.

This has had just a stellar smooth uptrend (price on bottom) and during the recent 4 month consolidation, it never tested long term support.
 

The most important chart out there is the 10 year treasury yield.  We can all see that clear as day topping pattern.  Check out the second chart that really shows the significance of these levels.  

If yields can break above these key levels then all sorts of regional banks, savings and loans and investment managers will quickly become momo stocks.  Some quality names of note include: TROW, FNGN, DHIL, BKCC, RJF, BOFI.

I'm a big fan of the stick with what you know methodology.  Maybe that small bank in your town is a publicly traded and just maybe it's ready to rip 30-70%.  It's definitely worth finding out right now as there are huge gains to be had still across the board.

ideas wrap up 11/14/13

This is just a list of some of my favorite ideas I threw on my twitter/stocktwits stream last Thursday.  They all still stand and look attractive.

Macro charts of importance

The ten year yield chart is at a critical juncture.  A massive H&S top is forming.  Either way this pattern breaks will tell us where rates are going in 2014.  This is the most important chart in the US markets bar none.  The colored lines are different cycle projections looking for key points in time in the future.  

Sentiment is very bullish here.  The shifting of the lower band suggests this can get much more frothy before a significant pullback occurs.

This stock bond ratio keeps pushing higher.  It is acting like it wants the 2007 high.

Breadth is mixed, but this chart is so clean I'll stick with it as a key.  Thus far the up trend remains.

XBI is showing some strength as it refuses to break down from a H&S top.  Over 125-127 we would see more wildly bullish action in biotechs to end the year.

Quick Trade idea

GNK had earnings last night.  They beat and it's ripping in the pre-market.  The chart shows a beaut of a daily head and shoulders bottom.  We could be aggressive and get long now versus that 2.76 low, but the pattern is so good we could just wait for a clear neckline break and target an attempt at the September highs.  Good Trading!