Nasdaq Technical Picture

The Nasdaq ended the regular session pretty much flat and formed another doji. Volume was higher than yesterday at 2.2 billion shares. Although today's session had a lot of volatility associated with the FOMC policy announcement, the real volatility occured after the close when GOOG released its quarterly results and reported lower than expected margins, a higher tax rate and thus lower EPS. Revenues, on the other hand, were in line. GOOG's results negatively affected most of the internet space in AH as well as many non-internet names such AAPL and BRCM. GOOG is currently trading at $377.50 from a regular session close of $432.00. NDX futures are down 17.5 points. Assuming a large negative gap on tomorrow's open, we could be looking a bearish island reversal pattern. In any case, the last three sessions will likely mark a lower high for the Nasdaq.

Trade of the Day - SEPR

Bought SEPR in pre-market and I got spooked on the open and sold for small profit. Got back in after lunch for a much better gain. However, I still missed out on over a dollar between the two trades.

In Play

SEPR - Purchased in pre-market - Profit taken 9:31
ATHR - Purchase $18.55; Partial profit taken at $19.05

Earnings - Notable Names Reporting Tuesday

Before the bell: JBLU

After the Bell: GOOG, CYMI, MSTR, PWAV, SYMC

Morning Watch List

NGAS - Chart profiled Monday on Downtown Trader blog- This is a great looking chart (symmetrical triangle) and I will be watching to see how it opens.



Last Nights Earnings Winners:

ZRAN - Gapped up AH - Beat by $0.08 and guided Q1 higher
ATHR - earnings beat and guided above consensus
KRON - earnings beat and guided above consensus
KFT - earnings beat

Other Earnings:

GILD - Originally traded down on earnings, but may snap back
SEPR - blow out earnings
NDAQ - trading down

Other Stocks of Interest

PAAS, BCRX, CNXS, RMBS, NGAS, NAPS (GOOG takeover rumour)

Nasdaq Technical Picture

A lower volume, status quo day which is pretty much what was expected given that the FOMC policy annoucement is scheduled for tomorrow. The Nasdaq hardly moved and ended the session with a doji candle.

Trade of the Day - ENER

After trying unsuccessfully on Friday to buy a snap back play in ENER, today's action was perfect and couldn't even be foiled by Herb Greenberg who appeared on CNBC while the trade was on to reiterate a sell on ENER.



Today's action almost formed a bullish engulfing pattern on the daily chart. ENER may need a rest after today's move, but I still think it is good for a few more day trades if it attempts to retest its broken trendline.

Leading Tech Sectors

The two leading tech sectors are software (GSO) and the SOX. The SOX is probably going to retest support after last Friday's big move. However, INTC looks ready to bounce up a bit here after the big fall since its earnings release. The GSO moved up nicely on Friday following MSFT's earnings release. Other names that participated in Friday's software rally include ADBE, CHKP (reports tomorrow before the bell - see chart in previous post today), and THQI. Other software names poised to move higher are CKFR and CTXS.

$SOX

$GSO

THQI


CKFR

CTXS

Earnings - Notable Names Reporting Monday

Before the Bell

After the Bell

Before the Bell: CHKP*, RDWR*, XOM, SGP

After the Bell: FISV, GILD*, NDAQ*, ZRAN*

* see chart above

RIMM vs. NTP - The Whole Patent Story

An obscure patent case that could have been settled for a few million bucks has morphed into a billion-dollar dagger hanging over Research in Motion (RIM), an enigma for investors and a distraction for legions of hooked BlackBerry users. A U.S. judge has threatened to shut down RIM's BlackBerry network next month for violating a handful of a dead man's patents — patents that U.S. authorities now concede may not be worth the paper they're printed on.

How it all happened is a twisted tale of bold inventions, hubris, pride, backroom lobbying and one colossal legal blunder by a sometimes naive Canadian startup eager to make it big in the vast U.S. market. To read more click here.

Nasdaq Technical Picture

Yesterday and today's action looks and feels strangely similar to what we had last week on Wed. and Thurs. before the last Friday's fall. However, for now, the tone remains bullish and volume is very high. This week's action snapped back last week's evening star pattern on the weekly chart. It will be interesting to see if we can take out the resistance marked by the green line early next week. The FOMC policy announcement on Tuesday will no doubt, play an important role.

ENER - Two Scratches

ENER was profiled here yesterday as a potential snap back play, however, as you can see from the chart, things didn't work out according to plan. Today it closed just below its 20 period EMA on a wide range bearish engulfing bar.

Trade of the Day - GVHR

Profiled here on January 19th as a chart of note for the positive divergence of its RSI, my alert was triggered when price took out January resistance.

Morning Watch List

BRCM - Currently trading at $70.16 off of its pre-market high of $74.00
PLAY - Earnings
AVII - License agreement for Hepatitis C virus with Chiron
RBAK - Break of recent trading range in pre-market.
PKTR - Earnings and upgrade
KLAC - Earnings

BRCM - Advances $13 in After Hours Trade

BRCM closed at $72.05 in AH trade on great earnings and bullish guidance. The $72.00 level is resistance dating back to 2000. On a break of $72.00, the next level of resistance is $110.00.

Trade of the Day - CKFR

Entered a position in CKFR as a continuation play off of yesterday's big move. This could turn into a momentum stock on a break of the $55.50. Next level of resistance is $60.75. I'm keeping this one on my momentum watchlist.

ENER - A Retest of the Broken Trendline?

It looks like ENER may try to retest its broken trendline following today's hammer which closed on the 10 period EMA. I'm putting this one on my watch list for tomorrow.

Nasdaq Technical Picture

Nasdaq Weekly Chart



Nasdaq Daily Chart


Today's action clearly favored the bulls with a very nice performance by the SOX. Nasdaq volume was very high at 2.4 billion shares. Expect the SOX to continue to do well tomorrow on the heels of BRCM's stellar results. The SOX will have no trouble breaking 539 on this, its third try in as many weeks. However, if we look at the Nasdaq weekly chart, it clearly formed an evening star candlestick pattern at the end of last week. Is this week's action on the daily chart a bearish flag? I don't know so I'm taking it one day at a time and as far as tomorrow goes, I'm bullish. NDX futures are up 9 points.

Is AMD the New AAPL?

AMD Monthly Chart

AAPL Monthly Chart


How far is AMD going to go? Looking at the monthly chart, it appears to be making a run for its all time high. If we go back to Oct. - Nov. 2004, AAPL's chart looked fairly similar to how AMD's chart looks now. Just a thought. But wait a minute, wasn't Apple always considered Dell's less worthy rival up until the Ipod. And hasn't AMD always been considered an under achiever in comparison to Intel. Hmm, AMD versus INTC and Steve Jobs versus Michael Dell.

Speaking of AAPL, look at that gravestone doji that's taking shape for January. I know the month isn't over yet, but it's not looking good. Also, AAPL violated its 50 SMA on the daily chart today. So clearly we are in need of a replacement for AAPL in 2006 and AMD is starting to look like a good candidate.

This post is just an observation and does not constitute a buy/sell recommendation.

CMG - Lives Up to its Hype

Nice action on CMG this morning. I personally don't like to trade stocks with such a wide spread between the bid and ask, but good trading for those who do!

In Play - CKFR and TWTR

CKFR - On a break of yesterday's high. Profit on 50% taken after a 1 point gain.

TWTR - On a break of resistance at $8.00 - good for a quick point on a scalp (10 minutes) but its almost come back in to $8.00.

CKFR Update 1:30 p.m. - Sold the balance of this position at $55.27

ENER - Herb Greenberg Poops on Energy Conversion and the Trendline is Violated

Since late December ENER has been a real momentum play and as a day trader, I've had a lot of fun with it. It went from $38 to $58 in just under one month. But MarketWatch's Herb Greenberg put an end to the party with his commentary Wednesday morning. Sound familiar?... Barron's and SUF.

Chipotle IPO

The buzz is that today's Chipotle IPO (symbol CMG on the NYSE) could be hot. The IPO price has increased dramatically from $15.50 - $17.50 on Monday to $22.00 late Wednesday. See details here.

Earnings - Notable Names reporting Thursday

Before the Bell: CAT, HON, GM, AMGN, LLY, UPS, NOK

After the Bell: MSFT, BRCM,SNDK

Nasdaq Technical Picture

At one point it looked like today's action would form a bearish engulfing candle, however with the attempted rally in the last hour of trade, we're still in this narrow trading range confined to the lower portion of last Friday's bearish candle. Volume today was 2.17 billion shares. The ADX is now 18.16, a level not seen since October and the +D and -D are kissing which is technically in line with the lacklustre, directionless action of the past three days.

Trade of the Day - CKFR

MXIM - Late Day Trade

I was about to close early because the market was going nowhere and decided to check Briefing.com just in case. At 3:22 a volume alert for MXIM read "MXIM spikes over a dollar in past ten minutes." I waited for the pullback and proper entry and managed to get half a point from this late day trade.

CKFR - Trade of the Day

Click on charts for larger views.

Even though I missed the big move in the morning, I was able to score 1.5 points on CKFR as it took out the morning resistance.

Morning Watch List

SLAB - Earnings - high pre-market volume
AVII - Momentum stock
TRMB, CKFR, NFLX - Earnings and guidance AH yesterday
RFMD - Earnings and upgrade
APPB - Jan comps and 2 upgrades

Nasdaq Technical Picture

The Nasdaq formed a bullish harami in the lower half of Friday's wide range bar on relatively good volume (2.05 billion shares). Today marks the second day in a row where the opening range (first half hour) defined the high and the low of the entire day's trade as highlighted on the 15 minute chart above. We are still waiting for a catalyst to move the market more agressively in one direction or the other. In the meantime, its a stock pickers market.

Trade of the Day - RELV

The trade of the Day was RELV. Thanks to DT for highlighting this name on the Downtown Trader blog yesterday. This stock is not liquid so patience pays off.

The SMH had a very high trade count in pre-market, so I took this BRCM trade on the open with no intention of holding beyond 15-20 minutes. It worked out perfectly as you can see from the chart. I learned this the hard way. Unless the gap up is a story or momentum stock or the market has a strong trend, these gap plays are usually very short in duration and often have sharp pullbacks as BRCM did this morning. Lesson learned - sell into stength. You can always get back in if there is a shallow, low volume pullback.

AVII was a quick, late day scalp on a break of a consolidation triangle. It closed on strength so it will be on my watch list tomorrow morning. I had a great trade with this name on Friday and after two consolidation days, it may be ready to pop again.

Morning Watch List

NDX futures are up slightly at this hour. Stocks trading up on high vloume in pre-markets: IMCL, ARBA, CPST,VTSS

Charts of Note

Click on chart for larger view.

I ran several scans tonight but was hard pressed to find anything of real note. However, I did notice that DTAS performed relatively well today on high volume. This name may have potential to run up in advance of its earnings report on Thursday. Also, by the same token, SNDK had a strong day today and unlike many high flyers that rallyed in the morning and gave back their gains in the afternoon, it managed to close near its highs. SNDK also reports on Thursday.

PETS closed on its highs and remains on my watch list for tomorrow as a momentum play. Other names that I am watching are RELV and BRCM

Canada Votes Today

I'm off to the voting station and will no doubt spend most of the evening watching the results on TV. Hope to be able to post a few charts later. It's nice to know that one prominent American cares enough about the outcome to post this message to Canadians!

Nasdaq Technical Picture

Click on chart for larger view.

We are virtually unchanged from Friday's close. Although volume was good at 1.9 billion shares, we couldn't move the tape. Except for the mid-morning rally, the market felt weak most of the day. I was hoping for a rally into the close, but at 3:15 I gave up on that idea. I think we need some outstanding earnings results from a few big names to turn things around.

Trade of the Day - PETS

Click on chart for larger view.

As mentioned previously in the Morning Watch List and In Play posts. Surprisingly, because I have a tendancy to overtrade, this was my one and only trade today.

In Play Update

PETS - Sold my remaining shares on the bid between $17.08-17.11 because this market feels weak.

In Play

PETS - Bought at $16.11. Exited 50% at $17.11.

Morning Watch List

RMBS - Heavy volume in pre-market trade - announced the repurchase of 5 million shares
F- Favorable earnings report
ITRI - Signed contract
MOSY - Barron's Online
PETS - Reported favorable earnings

Looking at a few momentum names that are still well positioned after Friday's slide: ANTP, ENER, AVII, NUVO, CMED, ZEUS, RELV

Futures

Nasdaq futures have turned negative and Asian markets are sharply lower at this hour. For an update click here.

Technical Analysis

All the pros will be weighing in with technical analysis over the weekend to explain why the markets cratered today. I plan to read them all, but for now here is one of my personal favorites Mike Ashbaugh

Nasdaq Technical Picture

Click on charts for larger views.

Wow, what an ugly chart. Trader Mike was right, yesterday's action was a dead cat bounce. Today's outcome was decisively bearish and supported by high volume (2.4 billion shares). The P&F chart is now indicating a bearish reversal is in play with a preliminary target of 2180 which would bring us 10 points lower than the January low and break the trend line. The extension of the rounded top formation, which I now see clearly, is usually quite brutal. The Nasdaq closed on its lows and is sitting on its 50 period MA. Next week will be interesting.

GOOG gave back $37 today. I rarely look at the GOOG chart because its lofty price keeps it out of my repertoire of potential trades. However, when I heard Maria Bartiromo talk about it on CNBC this afternoon, I decided to have a look. I noticed that the GOOG chart also has a rounded top with the addition of a falling window pattern (same as discuused for AAPL here yesterday). It looks like some of 2005's winners could get a bad start in 2006.

Trade of the Day - AVII

It doesn't get much better than this. Click on chart for larger view and entry and exit notes.

Update 1:20 p.m. - Word of caution -the 5 minute chart is starting to look like a H&S top.

Update 3:35 p.m. - Took a small long postion this afternoon $7.97. Sold half at $8.13 when it became apparent that this was not likely to go anywhere. Stopped out on the rest.

Morning Watch List

Yesterday's winners could be today's losers. Semis looking weak this morning. So far there's nothing too inspiring in pre-market. I will be trading light today due to options expiration.

FAST - Missed earnings by a penny. Price gapping down almost 4 points in pre-market.

RHAT - Gapping up nicely on increase in target price from $29 to $37 at First Albany

Charts of Note

GVHR - Short interst is 7% of the float and this stock looks ready to take off soon.

FAST - reports earnings tomorrow before the bell. Closed at an all time high today.

Intraday Trades - AAPL, NVLS, BRCM

AAPL - I had a bias going into the day that AAPL would close its opening gap. My entry was a reversal off of two side by side dojis. Just six bars into the trade a bearish engulfing candle appeared and I immediately dumped my shares. I tried to short but didn't get hit, so I waited patiently for a decisive reversal pattern. I found it on the first higher low - a bullish engulfing bar emerged and I placed my order on the next bar as price took out the high of the bullish reversal bar. I held it for just over a point as price was about to run into the declining 50 period MA.


NVLS - As highlighted here this morning on my watch list, NVLS was up in pre-market and had momentum going in from yesterday's big move. I placed a buy stop order just above the pre-market high so that I could concentrate on other trades.

BRCM - Gapped up too high and couldn't get anything going from there. Waited for a pullback and reversal signal hoping for an eventual breakout of the morning high but the break never materialized. Just the same, the bounce off of the rising 50 period MA, was good for a 1/2 point.

AAPL - Dumpling Top - Bearish Reversal

Click on chart for larger view.

Today's trading action could be the start of a deeper pullback for AAPL. From the chart above you will note that today's gap open was not filled in early trade, following which AAPL carved out a wide range bearish candle. All of this coming off of a rounded top = a bearish dumpling reversal top.

I'll be back later with some intraday charts.

Nasdaq Technical Picture

Click on chart for larger view.

Bullish Island Reversal

The Nasdaq gapped up and spent the morning rallying to close the bearish gap from Tuesday. In the afternoon it pulled back to 2300. Volume was above average at just over 2.0 billion shares. The Nasadaq closed above its 10 period EMA carving out a bullish island reversal off of yesterday's close. Semis keyed off of the favourable AMD results last night and decided that the INTC story was specific to it. Options expiration tomorrow - always difficult to play.