Today's Chart

The markets are a bit overbought and that could bring some weakness tomorrow but if it doesn't, then this chart may work out. PLXS is almost ready for a breakout of this box. If the markets don't continue today's selloff then the buy point is somewhere from $22.90 to 23 or so. Look for unusually heavy volume as this happens. If other traders see this box then the move up could be quick and leave you behind. If the stock breaks out but the market sells off badly, then this could come back below the buy point so be sure to measure your risk and decide what to do if it happens. Support is around $21.45 so don't let this one fall too much under that.

The Fed Did It Again

Or did he? We already knew there was going to be a rate cut. The question was for how much. Half a percentage point is what the markets wanted but as you saw the markets sold off towards the end. That's not exactly a good reaction to a measure that was supposed to help the economy and in turn the markets themselves.

I have noticed that since the markets topped recently, the volatility went up a lot and the markets had a delayed reaction to any positive Fed news. That could mean that the markets rally at some point tomorrow or that today's failed rally was it. I would have preferred that the markets didn't rally today and waited for tomorrow but we know what happened. On the other hand as of yesterday, the markets were already slightly overbought so this selloff was not a surprise. What we need at this point is positive earnings reports from the leading companies to save this market from any further selloff.

Chart Play

This following pick is a purely technical play. SOLF was a previous high flyer that doubled soon after a recent breakout all the way to $40. The market's recent breakdown and the stock's over speculation made it fall all the way to under $15 the past couple of days. The solar group itself suffered some very bad loses recently but some stocks in that group have found bottoms and are coming around. SOLF is one of them and as you can see it has made a significant stochastic crossover and will probably breakout of this box I highlighted. Buy point is now if the markets can get going tomorrow. I put no targets on stocks since it's not a good idea to sell a stock that's going up but SOLF will probably find resistance somewhere around $22.

Great Day On Fed Wait

Another good day as we await for the Fed decision tomorrow. The Dow is about to breakout above a very significant level just over today's high. Tomorrow should the Fed say something that pleases the markets, we will see a possible resuming of the previous uptrend. 12500 is major resistance for the Dow Jones. I think it will probably be broken tomorrow. Yahoo's earnings report did not go well with investors and the stock is down after hours. Many others are also going down in sympathy. I don't know why anyone cares about Yahoo as a leader at this point but tomorrow it will pressure the markets. If the Fed pleases, then Yahoo's bad news will be forgotten. The solar group is on the move and breaking out. I will have some picks later on today.

Western Digital

WDC has risen after posting earnings and may be ready to move shortly. Typically I would wait 2 or more days to build a base but it may not wait that long. If the markets get moving tomorrow or after the Fed announcement, WDC may climb to recent highs. Buy point is over 27.50 but if you can take the risk, then you could buy now. Chances of failure are greater if you buy earlier than recommended. Resistance is around 29.50 and 31.20. Waiting for a breakout is best.

Market Waiting For Fed

The markets moved up nicely today validating even more the short term bottom from last week. Looking at the charts we can see that the Dow, S&P, and Russell 2000 are setting up to move higher. That means that chart setups have a higher chance of working out. NITE and XLNX are continuing after a brief pause yesterday. If you didn't sell WFR yesterday then the turnaround today is positive. PETS is still hanging on but could breakout shortly. I will have some setups later today.

Another Nice Flag

Here is today's pick for Monday: PETS. Recent earnings news has awaken PETS for a possible move to the upside. Look at how the volume has picked up recently. That's a classic sign of renewed interest in this stock. There's a nice looking Bullflag in the making. If it can hold at this level and not break Friday's low, then it may run. Buy point on this one is somewhere above 13.35 on heavier than usual volume. This stock is a slow mover so don't expect big gains in the short term. Also keep an eye on SAY and BOLT since those too are making possible flags. Remember this market may have wild swings until this whole Fed/Sub prime situation gets sorted out. If you enjoyed this and previous posts then please leave a comment and let me know what you think or suggestions to improve this blog. Thank you.

Volatile Week

The markets had a nice follow through day on Thursday. That I think validates Wednesday's big up day and may be a bottom at least for the short term. Volatility will continue to be high due to the Fed meeting coming up and the hopes he will cut interest rates once again. We know that it will happen but the big question is by how much. If he doesn't cut enough, chances are that the markets will once again retest recent lows and may start a real defined down trend. Currently the markets are lightly oversold so there's room for some upside this coming week. My recent picks caved in to Friday's selling but are probably not done going up yet. WFR should have been sold due to it's morning gap up on Friday. When you have volatile markets, if a stock gaps up in price it's usually a sell signal for most traders. NITE and XLNX need more time to keep going but if this markets break to the down side, most stocks should be sold and patience to wait for better setups will be the key.

XLNX Ready to Move

I found a nice looking Bull Flag today. Hard to do with the majority of stock charts so beaten down lately. After posting decent earnings, XLNX has made this flag that needs maybe one or two more days. If it works out 21.75 to 22 may be a good place to jump in. The stock does seem to be a slow mover but with this great volume you may be able to secure a large position if you have the guts. Short term resistance will be somewhere around 23. If it can break through then 24 is within striking distance. Look at the increasing volume the past 3 days. That's very positive.

Are The Bulls Back?

Finally we had the bounce I had been talking about. This however is not the best way since it came late in the day. AAPL's bad news carried over from yesterday but buyers came in to rally it up. Tomorrow will be very important since we need follow up to this rally to validate it. Financial and housing stocks were the big winners so keep them on your radar. NITE still looking good but keep your stops close since I don't trust this market yet. WFR fell through support early on but I didn't recommend shorting and late in the day went through the buy point of 68.50. The solar group still badly beaten but some stocks are slow to react so keep an eye in that group. SOLF, CSIQ, SPWR, CSUN, and AKNS are some to keep on your watch list. I think there may be some short covering soon on those if this market continues.

WFR May Be Ready

Tonight's chart selection is WFR. I looked through so many charts and couldn't believe there was almost nothing looking good. That tells you the state the market's in lately. Too many stocks beaten down so much that time has to pass to make nice looking charts once again. WFR like it's peers has been selling off quite a bit for no good reason. The solar stocks group seems to follow the market quite well so that explains why they're so beaten down. WFR is currently in a box and the markets seem to be in a possible turnaround. If the market rallies, this group is poised to move higher. Also take into acount some short covering. WFR may be a safe bet if it can break through 68.50 on decent volume. If it falls through 62.25 then it may go even lower. Remember the market's oversold so this could be a good short term long play.

The Fed Does It Again

Another bad day for the markets. I'm glad it's over but I'm not so disappointed as others probably are. Despite the fact that the markets tanked today, they closed way off from their lows. That's considered very positive at least short term. The Fed finally did what he was supposed to: cut interest rates but he took too long. Housing and financial stocks were the biggest winners so far. Market's are still very oversold so I expect a bounce of some kind shortly. AAPL reported good earnings after hours but their guidance was not as good as it could have been so I see that many stocks are selling off probably on those news. We'll see if that carries over to tomorrow morning. If the markets can stay at this levels for at least a couple of days it could setup a move up but don't count on it. Last night's pick NITE made a nice move up but it may be a slow mover. If it closes higher tomorrow it may be a good idea to move your stop loss on it.

Possible Bullflag

NITE has risen after earnings and has made a small flag pattern. It would be best if it can wait 1 or 2 more days at this level before breaking out but it may not do it. Buy point would be above recent highs of 15.68 and support may be around flag lows somewhere at 14.60. If this market continues it's downward slide, then watch out. If it bounces from this oversold levels, then this flag may work.

Bad Holiday News

"Stock market futures pointing to sharp losses" not a good way to start the week. Today may be a Holiday but already the bad news are out. Markets overseas are tanking badly but that's just a follow up to last Friday's declines. First it was the housing bubble and now it's the subprime mess. I think that right about now we all know this but the news services are not going to let this one go easily. Before the markets open we can see the bad news but if you follow financial news casts, they keep pushing the bad news all day over and over. That's all that's needed to sell the markets down hard. Bears are loving it of course and I don't blame them. I remember about a year to 18 months ago I had a strange feeling one day. I said to myself: "this bull market feels like it's getting a bit long in the tooth". I'm not a bear so this was an unusual feeling. Yet the market kept going up. Sooner or later it was going to happen. It's true that it can fall faster than it went up. I just wish I was doing more short selling but with the market being so oversold now, I think looking for bullish stocks may be a good idea. Earnings season started so there will be lots of opportunities. Look for stocks that are holding tough during the selloffs. Those are more likely to go up when the markets do.

Let's Get Started!

Welcome to my blog. I decided to start this blog as a way of helping newbie traders. I remember when I started trading I had no idea where to get the education necessary to make it. It took me a while by trial and error and making some expensive mistakes but here I am. If you are new or are thinking about trading stocks, then make sure to check my blog often. I will try to do market updates but the main focus will be on stocks that are moving. I will also eventually make an education section to teach you how I do it. Don't expect anything fancy since I have learned that the best way to make money in the stock market is to keep it simple.

I read market news all the time and listen to so called "experts" tell me how things should be only to find out that their advice is worthless. When was the last time you saw an expert tell you to buy a great stock that failed soon after? I watch CNBC just like some traders do and learn nothing new every time. They talk about the great fundamentals of stocks and make you feel that there's no way this stocks can fail. But yet they do. I read other news, blogs, etc. where the writers get you caught up on fundamentals and give you 100 reasons to buy their stock picks. Eventually you too will learn what to look for and when is the right time to buy. You will also learn "the rules" which you will write yourself believe it or not. So let's get started and make sure you take the time to learn and due your own research. Good luck from The StockDog.