As Congressional leaders (I know there are some that will question me calling them leaders) debated over the politics of Obamacare vs. funding the government, the true leaders (market investors) realized that a shutdown was imminent and began buying in the overnight markets. It appears markets determined that a shutdown was good news because in order for the world's largest buyer to open its doors again, some sort of "certainty" will be in place in regards to the budget. Of course, there is this whole "debt ceiling gorilla" sitting in the corner waiting its turn for wrestle-mania, but I'll leave that alone for now.
Markets like certainty and for now it appears traders feel Congress must deliver a plan (certainty) to solve the current fiscal issue.
The S&P (SPX) traded down through the 50-Day Moving Average yesterday briefly touching 1675, but priced moved up & away (good sign) and is now trading above the measure.
Interesting enough, many stocks are displaying similar price behavior in that they too traded down to their respective 50-Day Moving Average and have bounced upwards.
Names to Trade (these are short term trades, typically 1-day to 1-week):
American International Group (AIG) looks interesting above $48, where the 50-MA is resting. Price found "intuitive support" at the $48.40'ish level, which is the 50% Fib retracement level, as drawn from the August 28 low to the September 18 high. Bias: LONG
Chesapeake Energy Corp (CHK) is displaying the pattern of finding support at the 50-MA and trading above. It also helps when price finds old highs, which now act as support as is the case here. Bias: LONG
CSX Corp (CSX) looks like it is on track (pun intended) to choo choo a bit higher to test the previous highs at the $27 area. Nice bounce off 50-MA. Note: worth watching to see if CSX is able to trade above and sustain the previous highs at $27. Bias: LONG
Halliburton (HAL) shows a very nice trade set up. Nice retracement into the 50-MA with relative strength looking favorable for a nice momentum move upward. Risk here is pretty well defined (out below $47.46 or as price trades below 50-MA). Bias: LONG
St. Jude Medical (STJ) worth watching as it approaches all time highs. Price used the 50-MA as support to bounce and trade higher 3 times since June'13 (June, August, and September). Now that price is approaching the highs, the onus is on the Bulls to maintain their commitment level. Any perceived weakness by the Bulls will bring out short sellers. Bears will enter the market when they see the commitment level of bulls waning: failed accumulation at tops or failed accumulation at bottoms. In either scenario, bears look for opportunities to exploit disappointment at failed accumulation. This may prove to be a picture perfect example. Bias: LONG. worth watching.
Constellation Brands (STZ) has sure been on a nice (upward) run since July'13. No other way to play this one. Price has taken a brief pause [retracement]; just need to make sure the mood hasn't changed from greed to fear. Nothing suggest this mood shift at this point. Bias: LONG
Disclosure: All equity positions disclosed are traded via Call or Put options. Strike entry is determined based on
Delta reading of >.70. SPX is traded via the E-Mini S&P.
Markets like certainty and for now it appears traders feel Congress must deliver a plan (certainty) to solve the current fiscal issue.
The S&P (SPX) traded down through the 50-Day Moving Average yesterday briefly touching 1675, but priced moved up & away (good sign) and is now trading above the measure.
Interesting enough, many stocks are displaying similar price behavior in that they too traded down to their respective 50-Day Moving Average and have bounced upwards.
Names to Trade (these are short term trades, typically 1-day to 1-week):
American International Group (AIG) looks interesting above $48, where the 50-MA is resting. Price found "intuitive support" at the $48.40'ish level, which is the 50% Fib retracement level, as drawn from the August 28 low to the September 18 high. Bias: LONG
Chesapeake Energy Corp (CHK) is displaying the pattern of finding support at the 50-MA and trading above. It also helps when price finds old highs, which now act as support as is the case here. Bias: LONG
CSX Corp (CSX) looks like it is on track (pun intended) to choo choo a bit higher to test the previous highs at the $27 area. Nice bounce off 50-MA. Note: worth watching to see if CSX is able to trade above and sustain the previous highs at $27. Bias: LONG
Halliburton (HAL) shows a very nice trade set up. Nice retracement into the 50-MA with relative strength looking favorable for a nice momentum move upward. Risk here is pretty well defined (out below $47.46 or as price trades below 50-MA). Bias: LONG
St. Jude Medical (STJ) worth watching as it approaches all time highs. Price used the 50-MA as support to bounce and trade higher 3 times since June'13 (June, August, and September). Now that price is approaching the highs, the onus is on the Bulls to maintain their commitment level. Any perceived weakness by the Bulls will bring out short sellers. Bears will enter the market when they see the commitment level of bulls waning: failed accumulation at tops or failed accumulation at bottoms. In either scenario, bears look for opportunities to exploit disappointment at failed accumulation. This may prove to be a picture perfect example. Bias: LONG. worth watching.
Constellation Brands (STZ) has sure been on a nice (upward) run since July'13. No other way to play this one. Price has taken a brief pause [retracement]; just need to make sure the mood hasn't changed from greed to fear. Nothing suggest this mood shift at this point. Bias: LONG
Disclosure: All equity positions disclosed are traded via Call or Put options. Strike entry is determined based on
Delta reading of >.70. SPX is traded via the E-Mini S&P.