There are a lot of headwinds facing the bulls today as the market opened lower on concerns of out of China that they will raise interest rates to slow down their surging economy. European debt concerns have also kept the bulls at bay and an in-line University of Michigan Consumer Confidence report has done little to spur buying.
After last week’s breakout, we said this week we were due for some consolidation and we are seeing that. It appears that the recent resistance levels are going to act as support going forward so we expect the market to resume its uptrend next week and into Thanksgiving. However, we are watching these support levels like a hawk because the trend can change on a dime and we have seen it happen before.
As we head into the second half of trading, the Dow is down 80 points to 11,203 while the S&P is off by 8 points to 1,202. We are looking for the indexes to hold 11,200 and 1,200, respectively, but additional support will come in at 11,000 and 1,175.
The Nasdaq is showing a decline 25 points to 2,530. We are looking for Tech to hold the 2,500 level with additional support coming in at 2,450.
Earnings are starting to wind down but the Retail sector will be a dominant theme next week. Home Depot (HD, $31.57, down $0.13) and Lowe’s (LOW, $21.81, down $0.49) will update us on the home improvement recovery while department stores Nordstrom (JWN, $41.71, down $0.69) and Sears Holdings (SHLD, $69.57, down $1.85) will give us a peak at the consumer.
Abercrombie & Fitch (ANF, $46.81, down $0.02), Gap (GPS, $20.29, down $0.24) and Urban Outfitters (URBN, $32.95, down $0.15) will let us know how the kids are doing. Wal-Mart Stores (WMT, $54.07, down $0.27), which will be aggressive for Christmas with free shipping, also chimes in with their numbers.
The talking heads are talking the market down and yes, it was not a good week for the bulls but we think the rally continues. A lot of our current trades are showing solid gains and we have a tiger by the tail with one hot Tech name which is benefitting from Cisco Systems’ (CSCO, $20.31, down $0.21) missteps. EVERYONE is jumping on our bandwagon with this name but we profiled this gem for our subscribers in mid-October after we saw a breakout coming.
Our Weekly Wrap will be out Sunday afternoon and we will try to have another video for our trading course ready. For those of you who are considering our options manual, How to Trade Options on Momentum Stocks, now is the best time to start learning options as we see a ton of trading opportunities in the weeks and months ahead. These videos provide insight on how to find trade setups and what we are looking at.
If you have any questions or would like more information, email us. With that said, subscribers, check the Members Area for the updates and have a great weekend, folks!