March 29, 2024

Daily Wrap

DJIA +5.22 (+0.04%) to 14,455.28; S&P 500 +2.04 (+0.13%) to 1,554.52; NASDAQ +2.80 (+0.09%) to 3,245.12

Early trading in the S&P was slightly lower but after noon EST made a move into the green and remained there for the remainder of the day.  Today was very reminiscent of the rally in general showing a strong sense of resilience and using any dips as buying opportunities.  If I had to point to something of worry it would likely be some of the volume which seems to be getting lighter in the index ETFs like the SPY.  Also the recent trading has left some indecision candles lined up on the S&P but again that in itself is not a signal and actually I would prefer to see a pop higher that fails or is then engulfed the next day for a more technical looking top.  In the meantime I am going to continue to look for good patterns, highlight them and then try and manage the trade to maximize risk/reward.

Stock moving today included Blackberry (BBRY) which announced late in the day that they received an order for 1 million BB10 handsets which is the largest single order in company history.  The shares closed up over 8% on the news and could be setting up for a run to challenge the recent pivot highs of $18.32.  I think BBRY will likely have fits and starts and will/should consolidate more below that previous level to provide a stronger base of support to move from but time will tell.

While presenting at the Bank of America Merrill Lynch conference, JC Penny (JCP) laid to rest some rumors that Ron Johnson would be resigning and stated that they have to continue to transform the business per their plans but also not lose site of their core customers and make sure they are continuing to come back.  Ultimately it wasn’t a large movement day for JCP but the focus for the stock is on the recent gap and if they can try and start to build a base, otherwise they could be subject to lower levels before this trend is finished.

Netflix (NFLX) gained over 5% today and I read from a news feed it was being attributed to an integration of Facebook (for US clients).  I am not really sure I see that as valuable as the markets did and likely just continuation action.  I would not be surprised to see NFLX take out the recent pivot highs and even test 200 and above but overall I think the large move in NFLX is likely overdone or at least done for now.  The stock has been consolidating over the past few weeks but I think more is really needed and likely here.  Again in shorter term trading we could first see more of a pop but I believe that will fade and lay way to a longer pullback which then can be reviewed for long opportunities.

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: ADES, CBLI, CBRX, CORE, DSX, DYN, GLP, KIRK, OPTT, TA

Watch List changes: I closed half of the CHK position today and also moved the stops up.  Taking half off on GDX yesterday looked smart today but the suggested stops were not hit yet on the remainder.  I noted on BBBY on 3/11/13 that this would be a spot to take some off with the 200 day SMA still above and resistance but I didn’t on the Watch List because I ultimately have a much higher level for the stock and the suggested stops are above where the stock was listed so the risk/reward seems worth it.  Today’s move took BBBY back to the break out trend line and as long as that holds this should still be a productive long set-up.

Back to the markets in general.  Volume has been light, candlesticks could be showing indecision but the trend remains in tact and higher.  Also remember this is an options expiration week and I generally find that if there is a trend going into OP-EX then the trend continues to OP-EX.  Not always and not necessarily all the way through Friday’s close but in general for the week (same with holidays).  I certainly would continue lowering risk in the broad market and personally I don’t like to just raise stops but also like to scale out into pushes in my favor.  The key is I wouldn’t avoid new trades that I liked and that had good risk/reward parameters but as I have mentioned many many times now I would consider allocating less capital to new trades as the one I am closing and therefore staying in the game but reducing overall risk and risk of hard earned recent gains.

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