Market Comments: Crisis in Japan will cause markets to gap down huge. With 3 of the 4 market watch charts gapping from just below the 50-day MA’s this represents a hard break of a long standing up sloping 50-day MA which is very negative. However, it is a big open against a long term trend so DAY traders will consider to possibility of a bounce. We will focus on the market ETF’s on the long and short side. Playing for a day trade bounce requires you to be very disciplined and nimble!
Long Focus:
There are some stocks that are at key support, in a strong trend and acted well yesterday. Here are a few worth looking at today. If the market’s gap reverses, these are stocks that could be played on the long side. Remember, ideally we'd like to see these hold S1 as ALL have a positive stack on the 2 day pivot pattern accept NSC. So I would not consider any trades below that level.
CNX, ATI, AVY, CERN, DVA, TD, XLE, FSLR, SOHU, AAPL, BTU, VLO, XLE, NSC
Short Focus:
With the big gap it may be hard to find stocks to sell down. The key is to find stocks that are good daily inflection areas and trade based on our OR rules. Don’t assume that just because markets are very weak that your shorts need to be. This is why on big days like today playing the SDS or the QID is often the best focus. That said here are some stocks in a good position to consider shorting if the right OR patterns develop:
V, PENN, COH, MAN, GS, AGN
