Cup & Handle in Cash S&P
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Stocks/Sectors and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading 2.00 points lower and the bond market is trading down 6 ticks.
Today, the cash S&P [$SPX>$SPX] sold off, taking out the recent lows (a) around 1400. Going forward, it’s important for this index to rally from these levels. Otherwise, the bullish cup and handle formation may be in jeopardy. At any rate, in this environment you might want to keep your longs on a tight leash and consider some stocks on the short side.
Celgene [CELG>CELG], mentioned last night (see archive for details) and in the strong Biotech Sector [$BTK.X>$BTK.X], began rallying out of a Trend Knock Out formation today (a) and still looks interesting to me.
3 Com [COMS>COMS], on the Pullbacks List, sold off earlier today but reversed to recoup much of its losses. Look for possible resumption of its strong uptrend here. Art Technology [ARTG>ARTG], also on the Pullbacks List, is consolidating at higher levels and seems to be at an inflection point. If it can take out the prior 1-2 bar highs it will likely challenge its old highs otherwise avoid the stock.
On the short side, two stocks on the Pullbacks From Lows List look interesting to me tonight. Pfizer [PFE>PFE] is a loosely formed inverted cup and handle. Tommy Hilfiger [TOM>TOM] closed poorly and looks poised to resume its longer term downtrend.
Best of luck with your trading on Wednesday!
PS – Reminder: Protective stops on every trade!