Today's Market Leaders

Keep an eye on these four individual stocks...they are certainly some of the market leaders that the rest of the market tends to follow. Bottom line, if the market is moving higher, these stocks need to be moving higher also and, more importantly, if these guys start moving lower, watch out! The four to watch: AAPL, AMZN, GOOG and GS. Here are the daily charts: What's there to say about AAPL besides...it's one of the strongest and most innovative companies out there and the market loves it...thus, we need to watch it.America's retailer...this is the new economy and Amazon is where it's at.Google rules the world right now...period.King of the club is "Goldman." As I heard on Bloomberg radio the other morning..."Where Goldman goes, so goes the market."

There are other important market leaders and some etfs, such as the emerging markets funds, that are helpful for gauging risk appetite but these four stocks are worth watching closely.These four alone will offer clues and insight about the market...look to them for upside confirmations and watch them for warnings of market vulnerabilities. The warning signs will be very significant because if and when this market makes a move lower, it will be swift.

Have a great weekend!

TLT

S&P Rallying After Earnings

The market is liking earnings right now...some notable movers are AA, GS and FCX. Goldman is an important stock to keep an eye on because it is definitely a market leader who's price action tends to dictate the tone for the market as a whole.

The S&P has been rallying in the futures market since today's close...good for longs. Here's a 30 minute chart with today's action with the TLT Trender v2 and a nifty short term volatility indicator:We'll see what the follow through looks like for tomorrow and we'll have to keep an eye on the 1078 gap level that is quickly approaching.

TLT

I Bought the Market Today...

Went long with a leveraged ETF today as the S&P began pulling out of oversold levels. Will it continue going up? I don't know, but you have to be willing to step up and buy during times of uncertainty when you see a tradeable setup. For me, the setup is a pullback to oversold levels on the stochastic while an uptrend stays intact...the uptrend is indicated by the green bars painted by the TLT Trender v2. Here's the daily chart that shows the oversold level and the green bars:The daily chart gave me the signal to start looking for a long entry and a specific stop loss level. To determine this, I use the TLT Trender v2 on the 15 minute chart along with a volatility indicator to pinpoint the entry. The volatility indicator looks for rising short term volatility, which confirms a breakout. I'll post later on in the week about the volatility indicator and how I use it...don't really have time to right now.

Hope everyone's week is going well so far.

TLT

Weekly Wisdom Quote

"Anyone who buys or sells a stock, a bond, or a commodity for profit is speculating if he employs intelligent foresight. If he does not, he is gambling."

Richard D. Wyckoff

Action in the VIX

Watch the VIX levels. Look for the VIX to confirm moves in the equity indexes. It's at a pivotal rally point where it will either briskly fall back down (and stocks will keep rising) or it will break out of it's current range (and stocks will fall). All of the recent rallies have quickly fallen back down...will it happen again? Here's the daily and weekly charts:Have a great weekend!

TLT

Bearish on the GBP/USD

The Pound recently attempted to rally against the dollar--a rally that could have provided a tremendous break out but it failed. Now the Pound is looking rather bearish and I present these two charts to illustrate my opinion. The first is a daily chart of the GBP/USD with the TLT Trender v2 indicator (an indicator that paints the candles green and red) applied to the chart. As you can see, the TLT Trender v2 has given a fresh sell short signal which indicates that the trend is down for the time being (note that the TLT Trender v2 is a trend following incidator and as such, it can give many false signals when the market action is choppy because trend following systems take lots of losses while waiting for a big trend to emerge). As noted on the chart, I'll be looking for some new short term lows to confirm the bearish trend on the daily time frame.

Next, lets take a look at the 4 hour chart.The most important thing to take away from the above 4 hour chart (besides the red TLT Trender reading) is that the prior 3 rallies have sold off rather quickly. This indicates that the market does not have faith in the pound and traders have been fading the rallies. So how am I going to play this? I will look to short the pound whenever the stoch on the 4 hour chart hits the overbought level as long as the general trend of the currency is bearish as indicated by the TLT Trender v2, however, I will use hard stops to prevent losses in the event that the rally continues upward...always a danger when fading rallies.

I'll post another update on the pound within the next week or two.

TLT

TSYS: Round 2

This is the second time I've posted on TSYS...the first post was for a potential channel trade but it did not work out very will. This stock has just chopped around a bunch since then but now it looks like it might be worth watching closely again. Here's the daily and weekly charts for tsys with a few comments:The bottom line is that both the weekly and daily charts are showing tightening price contractions which might lead to a tradeable breakout. I will probably start scaling in on the dips and I'll be looking for a breakout to new highs for a confirmation.

TLT

On Vacation

My wife and I will be traveling in Italy for the next week and a half. We will be staying in Rome, Venice and Florence and can't wait to be over there. This will be our first time in Italy and we've heard wonderful things about it. Obviously I will not be paying much attention to the markets while we're gone...I'll try to check it once every day or two but not like I normally do.

Hope everyone has a good week (and another good one next week) and I'll be back posting at the end of next week.

TLT

Weekly Wisdom Quote

"The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds."

John Maynard Keynes

Copper Update

Here's a daily copper chart (continuous contract) with the Commitment of Traders (C.O.T.) data in the bottom window. Copper is consolidating a little and has formed a flag pattern. The key will be to look for a breakout of the flag pattern and then to see if the C.O.T. data confirms the breakout.

If copper breaks out to the upside, I want to see the large traders line head higher and cross zero. Note that the Commercials and Large Traders lines were approaching zero and about to cross each other and then they pulled back...probably because of the recent weakness in the commodities markets (with the exception of yesterday and today). If copper heads higher but the Large traders line falls more, I'm bailing on copper because that should be taken as a warning sign.

Here's the chart with some annotations:Have a great day!

TLT

Weekly Wisdom Quote

"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

Calvin Coolidge

Stocks Sold Off A Bit This Week

I've been slammed with my lawyer work this week and haven't had much time to follow the markets. Today, I pulled up an hourly chart of the S&P 500 to get a feel for what the price action has been and selling has been the name of the game this week. My TLT Trender v2 registered a "sell short" signal at the beginning of the week on the hourly chart and here it is:As you can see, the TLT Trender had a good sell signal for this week...wish I'd of been around to trade it...oh well. I did manage to trim my long positions a little because one stock that I was holding (OMN) hit a stop loss and now I'm waiting to see what the market will do.

The daily chart of the S&P shows that we're still in buy mode according to my system and the stochastics is heading towards an oversold level...maybe a good point to buy little. Here's the chart:The market was probably due for a little pullback and now we'll have to be patient and look for clues as to what will likely come from the pullback. Will the dip buyers step up and buy or will the overall market panic and keep selling? Who knows. One level to watch is the $975-980 support in the S&P...longs do not want that level to be taken out.

Hope everyone's having a good week and I'll be back with something tomorrow.

TLT