The November-December consolidation seems to be melting up out of its trading range. It shows up on indexes such as IWM and SPY and market leaders such as AAPL, BLK and IBM are starting to take out resistance. While I don’t know how long this move up will last, low volume weeks like this week have generally been bullish in 2009. There is also the possibility that the “January Effect” comes into play and that this run continues into 2010. Will it last? Is AAPL going to $300? I have no idea. But, it seems that it is worth a shot to buy some of these high flyers using the all time high as a stop out.
Note that these momentum stocks have tried to breakout multiple times before this attempt. Usually a line of resistance such as the all time high does not get broken on its first try. I’m more confident that these breakouts have some room to run based on the consolidation and failed attempts before the breakout.
Traders that have been betting on FRE and FNM are big winners today. Both up over 20% in the pre-market. While these stocks may frustrate fundamental and technical traders, the common theme is that the government continues to generate positive news for FRE, FNM and AIG. Getting in bed with the government might not be a bad idea in 2010.
IWM
SPY
UNG appears to be bottoming. I’m looking to enter a position as soon as today. I would use the convergence of support/resistance in the $10-10.50 area as a stop out zone.
I happen to agree with MV that short TLT (or long TBT) could be a good 2010 holding. There is a lot of support in the $85-86 range so I would not want to get short right here. I would be looking to short TLT on a rally up to resistance at $92-93.
AAPL
BLK
IBM
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