Watchlist for December 7

As the Market Roared back from the recent selloff essentially erasing the 2 day loss.  This should give the bulls the upper hand over the bears coupled with a potential Santa Rally running up till the end of December.  Lots of charts are setting up for potential breakouts.  Below are a few I will be watching this week for potential Option plays.

SPY

SPY

YHOO – Looking for retest of 36 and potential break higher

 

BABA – A break of the highs should send this one higher as well as give YHOO an extra boost… I’ll watch in conjunction.

BAC – Financials have been gaining interest as of late… BAC could head back to test that 18 level and could break higher… notice increasing accumulation volume.

BAC

JPM – Another Financial that could continue to gain some momentum off the latest bounce.

JPM

SINA – nice and tight consolidation here with short term higher highs on the daily… could be setting up for a breakout of the recent highs around 52.50’s.

SINA

MA – 100 number is key here… I think we could definitely see a test of the hundo here this week… A break of the 100 mark might set this one off… Has remained strong and I like the vol here… 

MA

ABX – Lower priced stock but If it continues its move, this might break out higher above 8

ABX

Short term bottom in for OIL?? $USO $UCO

OIL seems to be gathering some momentum recently, most probably due to the tensions in Syria but we may be able to take advantage here and together it with a nice double bottom that has formed off the lows in August.  I think we get a short term bounce here while all this shit resolves itself.

USO:

USO

 

 

UCO:

UCO

$AKAM Selling off

AKAM dipped below a critical support area around here at 56 – 56.50 and had a small bounce back.  If this does not hold, it could easily move down to the 52 area which is the next major area of support.

Why I Expect a Bounce Next Week – A Few Oversold Indicators

We all know the Stock Market has taken a Shit in the past 3 days.   Even people who don’t watch the markets frequently have asked me “Brah, you see the market?!?! Whats going on?..”.   

Lets take a quick look at the SPY chart which reflects the S&P500 index below.  The SPY closed right around that 197 support area after the 2 day massive selloff.  This may provide some support for the markets and we may see a bounce Monday.

 

 

Here is a closer look at the Nasdaq dip (QQQ’s) – It breached below the 104.50 support area and kept going on extremely higher volume.

 

Below are a few overbought / oversold indicators that can be used for market breadth and overall sentiment. Most, if not all of them are indicating there should be a short term bounce in the very near future.

Percent of NYSE stocks above the 50MA – As it sits now, there are roughly 19% of stocks that are above their 50MA after the recent sell off.  If we are to assume past movement would indicate future action, stocks are due for a bounce at this area.


 

 

NYSE Bullish Percent Index – Pointing to a bounce soon

 

 

NYSE New Highs / New Lows Index – Also at its lowest level in years

 

VIX Volatility Index – Measures the fear in the market.  When the VIX spikes to these levels, it indicates there is extreme panic and the VIX is set to normalize soon which results in an upswing in stock prices.

 

Percent of NYSE Stocks above the 200MA – Another indicator at its lowest levels in years.

 

NASDAQ McClellan Oscillator – Overbought / Oversold index (One of my Faves) – Market set to rebound when at these levels

 

Percent of NASDAQ stocks above 50MA – similar to that of the NYSE but NASDAQ Stocks

 

 NASDAQ New Highs / New Lows – Currently at the same levels of the last big pullback we had in October 2014.  Indicative of a short term market bounce.

 

Disclosure: Currently long Calls in NFLX, QQQ and AAPL