USO is officially off my buy list. Frustrated by the weakness in oil. There seems to be no buyers at all intraday. I give up hoping for this to the be the reason for a fall in the market, and instead will focus some time to look for possible shorts in the energy sector:
XLF broke the symmetical triangle i drew yesterday but in looking at it, i made a mistake. What i feel we actually have is an ascending triangle that is similar to SPX's. and it hasn't broken it yet but is instead at the resistance. Oscillators are looking bullish:
UUP is strong once again. Reason for the weakness of oil. Surprisingly though, other commodities did not get hit nearly as much as oil as dba was actually able to get a gain of the day. We are at a point of resistance where a close up will confirm that the dollar has bottomed:
OIH is a sector worth looking at for possible longs in a very short timeframe. Unless it totally breaks from the current channel, we should be able to get a decent rally from them starting tomorrow. It showed great relative strength today vs USO:
Analysis: Overall, i feel like i misread the market yesterday. I do feel good that atleast i did spot the possibility of a rally off fib levels on the SPX but overall, i was caught off guard by the strength in the dollar and financials. Despite the strength today though, no important resistance was broken. We are just at a point of resistance once again and since we are in a neutral setting, i can't feel too bullish or bearish on the next move. the test of resistance simply tells me that we should remain in cash until we see a breakout or a failure to break resistance. In my opinion, today was a day to sell or hold, not to buy. My scan of stocks reveal that the good buys out there are overdone and it's best to wait for a good intraday pullback to get in on a new position. The best play would be to be half long and half short in the market. but since i don't like to do that, i will be sidelined going into tomorrow. (with the exception of a short holding in NDAQ put i left open for earnings) To be clear, i am NEUTRAL, no longer bearish neutral.
Game Plan: watch the stocks on the conviction buy list for a quiet pullback and if the timing fits, buy a small long position. On the short side, it all depends on oil and the dollar. The only shorts i like are very sensitive to the price of the dollar, therefore, i will be more cautious in buying shorts than i will longs. Its definitely a stock pickers market so its important to choose wisely, even from amongst the same sector
Conviction Buy List:
Strong Retail (shld, rost)
Strong Financials that have consolidated in price lately (ibn, bk)
Breakout Pharma (bmy)
Oversold Strong Tech (aapl, goog)
IYK consumer goods (pg, ko, pm, pep)
WYNN
Conviction Sell List:
Some Transportation (drys, osg, fro)
Some Energy (anr, btu, wlt)
Exchanges (nmx, ice)
STV
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