A few things to watch this week

this week appears dependent on the financials.  Look at how tightly wound the weekly chart is.  Many have noted the relative strength in the big banks like JP Morgan and Goldman Sachs.

Financials are very important here at trend support from 2009.  The thing that interests me is note how the last trend line touch did not lead to new highs,  I'm very skeptical until we reach new highs.

I forced myself to find some things to like in the space.  The group that stands out is insurance.  AIG, PGR, BRK/B in particular.

As commodities work off oversold conditions, some machinery stocks are starting to rally.  Deere is testing a major resistance level this week.  Can it break out?

Trade wise..

CDXS bounced nicely at the 50 day MA and lower bollinger band confluence.  Can it continue?  I'd trade it against 4.35ish.  If it's a risk-on market this could make a run near the highs.  Note earnings are Thursday.

Also on my list, potential daily H&S bottom in hated farm machinery stock LNN, Indian steel name SSLT trying to break a large downtrend, Chicken producer SAFM and eyeing OCN for some consolidation this week.

Trade 'em well!

Bull Pen

Last week's pain was gruesome.  Traders were able to avoid it, but growth investors really couldn't.  The market doesn't seem to care.  The VIX closed the week in the 12s again.  WTF?  The market is a bull pen!  As Ed Yardini says, we're all bulls now.  Check out the chart he shared on the investors intelligence sentiment poll.

Psych 

When stress and emotion is high, it's a great time to review and re-assess everything.  It's where you'll gain the most wisdom about working with your tendencies to improve your trading plans.

Weeks like this are why you have a trading plan that includes much more than stops and targets.  Everybody has to work around issues like emotional intelligence.  Again, the way to figure out our issues is by soul searching to find what we think deep down about the market.  Rule of Thumb: if it's not uncomfortable to think about, you're not digging deep enough.  Then we dig into the data that your actions provide.

Market Internals

When looking through the internals, it's easy to spot out multiple reasons to think there is more room lower.  Here are some examples

The smoothed trader's index is just now getting to sell zone.

The VIX is already back in 12s thanks to Friday's rip.

The IPO ETF is really starting to struggle.  Notice how much weaker it acted than the major indices this week.

The % of stocks above the 50 day moving average is falling sharply while the % of stocks over the 200D MA fails to budge.

Groups

Transports are still holding support.

Utilities keep trying that 200D and major uptrend support line.  A break lower adds credibility to the mega bull in bonds may be over.

Real Estate bounced where it needed to.  How strong will this bounce be?

While flashing relative strength, Energy may be near the end of it's run as XLE nears the 200D MA.

The agribusiness ETF MOO s showing fresh relative strength and there is some great action in the group like DE

Bonds

German 10 year bund yields have ripped above the 50 day moving average as bond investors run for the exits at the 0 rate boundary.  Thank god.

High Yield Corporate Bonds continue to test major resistance as it gets some inflows from treasuries

The Rest

Industrial metals are the stars of the show and are testing the 40 week moving average.  Copper ripped through this average last week.  Will the group follow?

Nat Gas appears to be 'free and clear' for more upside next week

Overseas, not much is going on.  It appears to be a big week for China coming up.  My girl @BeckyHiu noted the action in Short China ETF FXP.  It might rip big.

It became evident early in the week that the Yen idea I shared last week wasn't going to work.  The dollar was very weak, and there was no upside movement in the yen.  Now is it breaking the other way?  It lost a key support area Friday.

To sum it all up, as Warren Buffett says: be fearful when others are greedy.

Trade 'em well!

More Color on JCP

Yesterday I chalked up a piece on SeeItMarket about JCP.

The stock has tried to break a range in both direction and failed.  It's possible we just stay in this range for a couple more days.

Alternatively, a break lower leads to an important test of 2015 trend support.  Now that we can place a stop 2-3% away we can give it a bit more room and only be out if the trend ends.

Thanks for reading!

Pandora

Pandora has shown some awesome relative strength since reporting earnings on 4/23.  Now, as the market corrects this thing has refused to budge lower and has formed a tight bull flag.

Note the 10 day moving average is at 17.85ish.  We want to see it keep that momentum/level over the coming days.  It's a decent stop area too.

The 200 day moving average is at 20.18 and makes for a clear target.

Trade 'em well!

O-V-E-R

The short lived 2012-2013 3D printing rally was spectacular as shares of SSYS rallied from 17 to 138.  Those days are now long gone.

After another disappointing earnings and guidance SSYS has fallen to trend support from 2001.  Some may say it's over - well yeah... that's looking in hindsight.  Now there is some low risk opportunity for bulls.  There's no way to know if it'll work, but it's interesting regardless.

Trade 'em well!