Top 10 Ideas For the Week of June 21, 2010

Reviewed over 500 charts and posted over 150 this weekend. It was an interesting quadruple witching week. Gold is just flying, no questions about it, and the dollar appears to need some more time to consolidate. Oil and the equity indices all seem to be in ranges and need to be watched carefully. When they break the range they will move and you need to be ready. With that backdrop here are some ideas for the week in no particular order.

1. Apple, ticker AAPL


Broke out of a symmetrical triangle and made a new high. Price target is now 300.

2. Rambus Inc, ticker RMBS


Bear flag after a big drop, bodes for another drop. Target is 15.

3. ProShares Ultra Short 20+ Treasury, ticker TBT


Descending triangle completing, watching 37.50 for a break out. A break lower would have a target of 30ish.

4. American International Group, ticker AIG


This stock has historically traded off of Resistance/Support. If it breaks 38 expect a run to 43.82 - 44.82 and beyond that then 54.20/55.90. Above 55.90 there is clear air. Support is at the 200/100SMA.

5. Intercontinental Exchange, ticker ICE


Trying to break out of ascending triangle formed by SMAs and 122.50, target on break out and hold of 130 is 160.

6. Mastercard, ticker MA


215 is a crucial level to watch and can play either way. A break and hold higher sees 227 - 230. Failure sees support at 195 below.

7. Delcath Systems, ticker DCTH


A break below 8.75, leads to 6.93 next and further support then at 6. Make sure it sticks below 8.75 to play.

8. Cliffs Natural Resources, ticker CLF


Rejected at the 100SMA with the 50SMA driving down. Looks to test 200SMA again.

9. Lululemon Athletica, ticker LULU


Strong move higher. 50 is the next resistance and through there can try 60. Support at 44 below and then 39.81.

10. Shanda Interactive Entertainment, ticker SNDA


Descending triangle with support at 38.20. Volume declining, doesn't look good. Support below is at 33.70 - 34.00 area the 30.83. Resistance at the 50/100 SMA convergence at the downtrend line near 43.15 and 200SMA above that.



Bonus Idea: Sears Holding Corporation, ticker SHLD
Daily Chart


Under 76.80 now will see resistance at 70 below.

Trade'm well this week.

Inter-Market Connectivity

posted Thursday night:

Looks to me like everything converging on tomorrow. $USDX, $GC_F, $CL_F, $SPX, all right at key levels. Will NFP be the fuel or the fade? 7:27 PM Jun 3rd via StockTwits Desktop

Two things to note initially, first each of these broad market indicators had moved to key short term support and resistance levels on Thursday's close. The dollar index bouncing at 87.40 area, Gold between the 50 SMA and 1227 Fibonacci level, Oil at 74.50 and the SPX at convergence of 20 and 200SMAs. Coincidence? Second, look at the 20/50/100/200 SMAs. All rising for the dollar index and gold, and all falling for crude and the SPX. So at key levels and SMAs showing a bias. Hmmmm. Third, as the catalyst hit they all moved with a singular economic reaction, in the direction of that trend, gold and the dollar rose, and stocks and oil sank. Should you expect this? Yes!

All Markets Are Connected

This blog is about Technical Analysis but even a chartist can benefit from understanding how different markets interact. To me the key is the stronger dollar.



Friday's move indicates that the dollar is heading higher, at least to 89.02 a 100% retrace of the down move from the March 2009 highs to December lows. The break out of the ascending triangle, bounded by the 20day SMA would give a target of about 90. The flying dollar gave a boost to Gold which had retested 1200 earlier,



roaring back $20, putting the recent highs back in sight. It also reversed the up move for Crude Oil (West Texas Intermediate) dropping it nearly $4 from the high of the day back towards the 71.20 support.



Most importantly for this crowd, it drove the SPX down all day until it hit key support between 1057 and 1075.



Understanding and watching this interaction can often give clues as to the direction of the market you are trading before the impact is felt. So keep watching the the broader market for clues and absorb the impact to your world.