Exposing Ideas to the Envelope of Serendipity

Contact moo at: bluechipbulldog@gmail.com

Friday, April 23, 2010

Charts and Thoughts for Friday

After scanning many hundreds of charts last night and early this morning, my sense that a shift in the trade-winds may not be too far off was only reinforced. The long-term, or "big picture" view still looks quite positive from a chart perspective, and indeed, there are still a fair number of appealing chart set-ups for the near-term -- but considerably fewer than there have been. At the same time, many stocks have either reached or are fast-approaching some technical targets, the $SPX is nearing the 1,229 level we've been watching for since the start of the rally, the $RUT has strong resistance not too far above here, and the month of May (where we're supposed to "go away") is just around the corner.  This doesn't mean that a trend reversal is necessarily looming, but it means that I'm increasingly cautious for the near-term. While I still see long plays and opportunities, I will likely be reducing overnight long exposure as we inch ever-closer to technical milestones.

The very long-term chart of the $COMPX looks quite bullish, with a decisive conquest of the primary descending trendline and an intriguing potential double-bottom base taking shape. Near-term, there's overhead horizontal resistance that could soon come into play. The Russell 2000 has been going gangbusters, on the other hand, and has a little room left to explore before some solid resistance may give pause to its persistent advance.

Precious metals and oil stocks remain on the watch, with both groups trying to break free of near-by resistance levels after some consolidation, and homebuilders and defense stocks are looking quite bullish. I'll toss a few more charts up as the day unfolds if I get a chance. There's a potential inverse head & shoulders pattern trying to confirm in the /ES that I will be watching and that if it confirms would resolve near our $SPX target.

Trade well.

-- Brinkley
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