Relocation

A short note to keep readers informed that we'll be relocating to U.S for a few months end of this week. Things are getting busy and I will start blogging again after I settle down in U.S in 1-2 weeks time. To be updated when there are new blog posts, I encourage you to subscribe to any of these Feed Readers. There are free of charge. Meanwhile, visit anyone of my sponsors here :)

Market Breaking Out...Almost...

Last week, I talked about the major indices coiling up in triangle pattern. Last Friday, I thought we would likely break to the downside..that is until the last hour of trading when the market surge on short squeeze as rumours of Ambac Financial Group, Inc. (Public, NYSE:ABK) bailout circulated. So right now, we are still technically inside the triangle and breakout is to come Very soon. The market is certainly behaving in a very erratic manner of late, which has made trading even more challenging!

Mon: Existing Home Sales
Notable earnings: LDK, LOW, JWN, OKS, ZBRA

Tue: PPI, Consumer Confidence, Fed Vice Chairman Kohn speaks about U.S. economy & monetary policy
Notable earnings: AZO, GPI, HD, RSH, KWK, PZZA

Wed: Durable Orders, New Home Sales, Fed Chairman Bernanke speaks,
Notable earnings: BYD, DLTR, DBRN, EGLE, IHP, CRM, TOL

Thurs: GDP
Notable earnings: AIG, CEDC, CPHD, CMED, DECK, FLR, GPS, HANS, KSS, OMG, SHLD, SGMS, FAF

Fri: Core PCE Price Index, Personal Income, Personal Spending, Chicago PMI, Michigan Sentiment, Fed Governor Mishkin speaks

Chart Analysis of AMZN - Bearish

A reader asked me why I considered Amazon.com, Inc.(Public, NASDAQ:AMZN) to be bearish in my earlier watchlist.

From the chart above, you'll see that AMZN had 2 double top formations. One bigger one, another mini one. Both broke the neckline, which is bearish. It has also been in a downtrend since start of the year. At the point when I was going through my watchlist, I notice AMZN coming up against several resistance: neckline (former support turn resistance) and also near top of the downtrend channel. If you use moving average, you'll see that it is also nearing some key moving averages. But I didn't include them as I want to show that even without looking at moving averages, the pattern is still there.

Stocks in my watchlist do not necessarily pan out or pan out immediately. Even if they do as I expected, I may not take the trade if it does not provide at least 2:1 reward to risk ratio at the point of entry because sometimes the stock may have moved too much and I'm not comfortable with that. I've learned to be more patient and wait for the setup to confirm. I either set an alert in my trading platform or place these stocks which are about to breakout or confirm in a separate smaller watchlist, so I can keep a tighter watch on them.

Triangle Pattern on Major Indices

We are seeing yet another triangle forming in the major indices after the last one broke down on first trading day of the year. As symmetric triangle can break out either way, keep an eye on them.

Mon: Markets Closed (President Day)

Tue: Minneapolis Fed President Stern to speak about U.S. economy
Notable earnings: ACLI, BCS, CROX, HPQ, HOC, NTRI, NUVA, JOE, UTHR, WMT, WLT, WFMI

Wed: Building Permits, Housing Starts, CPI, FOMC Minutes
Notable earnings: CECO, LFG, LNET, RIG, STP, SINA, OII

Thurs: Leading Indicators, Phil Fed
Notable earnings: ABX, BCSI, EV, CHK, ESRX, JCP, MGM, POOL, PRAA, OSIP, VDSI, GG, HME

Fri:
Notable earnings: LTM

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Bullish watchlist: STLD, MCO, EMR, EDU, CNX, MDR, PCP, CEG, CLF, CTRP, AGU, AG, MEE

Bearish watchlist: FLR, BEN, SYNA, LRCX

Triangles: Some of those in last week's list are still awaiting for breakout. On top of that, I'm including these: HOG, MNST, OSK, YRCW, MUR

Watchlist for the Week

Bullish watchlist: IBKR, CE, SLB, KMP, FAF, WHR

Above is Interactive Brokers Group, Inc. (Public, NASDAQ:IBKR), also one of the brokers I currently have. Not many stocks out there still have such nice uptrend.

Bearish watchlist: SYNA, DRIV, AMZN, VMW

Triangles: AGU, CTRP, YUM, ZMH, GILD, FMCN, BTU

Above a chart of Gilead Sciences, Inc. (Public, NASDAQ:GILD). Forming a symmetrical triangle, waiting for breakout. Could go either way.

Get Ready for Some Market Action

After taking a break for almost a week, I'm ready to get into some action soon. So is the market...after consolidating in the last 4 sessions. See my next post for the watchlist.

Mon:
Notable earnings: ACLI, CG, GGP, CMP, LCAV, ZOLT, VMC

Tue: Treasury Budget
Notable earnings: ANR, NILE, BWLD, CEPH, BGC, GM, EXPD, TAP, PNRA

Wed: Retail Sales, Business Inventories
Notable earnings: BIDU, DVA, DE, GVA, MICC, NTGR, NTAP, NVDA, PFCB, VCLK

Thurs: Trade Balance, Fed Chairman Bernanke to speak about economic outlook
Notable earnings: EYE, BRY, BUCY, CMG, IR, PCLN, WTW, UBS, VMI

Fri: NY Empire State Index, Capacity Utilization, Industrial Production, Michigan Sentiment
Notable earnings: ANF

More Earnings This Week

This post will be a short one, no charts. Last week was a recovery week for the indices. But whether it is a reaction rally or a genuine bottoming remains to be seen. There is still alot of companies announcing earnings this week. I'll be trading light this week as we approach the Chinese New Year. Gong Xi Fa Cai to all!

Mon: Factory Orders
Notable earnings: APC, ADM, BEAV, HUM, ILMN, RMBS, GOLD, SOHU, SIRF, YUM, WEN, TMA

Tue: ISM Service
Notable earnings: BHP, BBBB, BSX, BRE, BP, CBG, CG, CME, FORM, HAR, MLM, NYX, NBR, RVBD, CAKE, THQI, TM, TZOO, USNA, XL, WHR, DIS

Wed: Non-farm productivity, Phil Fed President Plosser speaks on economic outlook
Notable earnings: AKAM, ACL, BIIB, CCJ, CSCO, RAIL, NOV, PPDI, RL, PRU, RACK, REG, TWX

Thurs: Pending Home Sales, EUR interest rate statement and ECB President speaks, Dallas Fed President Fisher speaks on economic stability & central bank
Notable earnings: DO, EOG, FLIR, MDC, MFE, MCO, ATVI, AET, AG, AOC, APA, BMC, CTSH, CF, BG, RAI, PEP, PENN, TRA

Fri: Wholesale Inventories
Notable earnings: AIV, BEC, CVH, SYNT

Google After Earnings - Chart Analysis

You may have read by now that Google Inc.(Public, NASDAQ:GOOG) tanked almost 6.5% after reporting its earnings. After hour trading was 527.4. Above a daily chart of GOOG. Look for support in the region of 520, 510, 500. Looking back, since GOOG broke the triangle formation to the downside on 4 Jan this year, it never recovered. Technically, this is a very weak chart. The last time, it found support at 200 SMA (back in Aug'07). It has now cut through 200 SMA, retested it yesterday and now with this gap down, it looks like a point of no return

On a side note, I did not trade most of the stocks in my watchlist, either because they didn't confirm technically or risk/reward did not work out to be favourable ( I require reward to be at least twice of risk.) Weak sectors such as retailers, financials and housing are now behaving very strong. I will continue to watch this group closely. I did dip my toe in XLF Puts prior the FED meeting, but was stopped out even before the meeting. I was glad I placed a tight stop, because given the trading environment these days, at the back of my mind was like "if it works, it should show right away, if it didn't, it should also show right away".