Closer Every Day

Alcoa is selling off a little afterhours which is not the best of indications for the bulls, but the Dow Industrials and Transports closed higher for the day. While the pattern is getting muddy, I still think we have several more days before we ring the bell on wave (5) of [A] in the Qs. The reaction to INTC earnings Thursday evening may give us more insight.

Oil appears to have completed 5 waves up from the December 14 low, but if this is a 3rd wave as I suspect, then it could be hard to pinpoint the top of the current upmove. Currently, the move is too short to be all of wave 3 of (C), so either it extends higher, pullsback and then moves higher, or wave (C) is complete and the top is in. I don't think it is the latter. If we get a pullback, and then a move higher, oil will be going alot higher than most people are thinking at the moment. I have targets around the 103 area, but if wave (C) extends, oil could move up to the 130+ zone. While this is not likely, we must keep this possibility in mind.

Gold and silver may be near the end of their countertrend moves after the decline from the top in December. Today was the first poor close since the recent upswing began.

Currently, I am looking for shorting opportunities in individual stocks that may be breaking down early. I am long the Qs from 46.42 (a little late after the breakout), and I am willing to take a point of heat for a target around 48.40+ unless we get an outside reversal day or some other significant sell signal.

EXPE is continuing to act well on the short side. GME announced a share buyback plan. Perhaps it can support the stock, but I don't think it will be enough to stem the tide of bad news. AMZN looks like it is ready to croak, of course, after I got stopped out of my short position in December. If it fails here, it is headed for its 200dema around 102. RIMM looks weak and BIDU appears to be breaking down, but 200dema support is not far below. GRMN may roll over after it completes an ABC rally.

On the long side, I just missed getting stopped into a long position in CSCO today by 1 tick. It then proceeded to close poorly. I will leave my long order in place. If it moves higher now, it should pop nicely. JNPR and EBAY have formed nice triangles, but these could go either way. LINTA is moving up for a test of its October high. Of course, the triangle that I didn't buy, CAT, was up 6% today.

Looking at some IBD 100 stocks, KGMB has moved up in 5 waves from its December low and could form a handle soon. TLEO is forming a handle. ININ has turned up nicely. ATPG just finished 5 waves up from its recent low and may now be forming a handle.

Intermediate term I like STRA, MON, ATLS, CMG, IAG, BVN, ROST, TJX, WYNN and FSLR, although caution is advised on intermediate term trades at the moment.

Just keep in mind, until we get a strong sign of a reversal the trend is up with a target for the SP500 of at least 1158.

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