Intermediate-Term Traders Report
I wonder how many traders and investors sold
Research in Motion (RIMM) based on its weekly chart. It formed, as of the end of
last Friday, a bearish tail, and the 14-period RSI was showing a negative
divergence. It appeared a breakdown was almost guaranteed. No matter how a
pattern looks promising, you cannot enter a trade until the price confirms the
validity of the pattern. Some traders had to get out of their short positions
with losses because RIMM traded above last week’s high.
Let’s review the market. S&P 500 Index ($SPX.X) gave us a false breakout.
Buyers were forced to bail out, and it shifted the momentum back to short
sellers. It appears the index needs to re-test 1100.
Notable stocks of the week:
Oil Service HOLDRs (OIH): It is still going. Definitely, the rising price
of oil is pushing the stock higher. OIH hit the 100% Fib projection level and
sold off. I’m sure some traders are planning to sell as soon as the stock
violates a trendline.
Genzyme Corp (GENZ): The stock appears to be forming a double top, and it
looks ready to test the 38.2% Fib level.
Economic Calendar:
| Date | Time (ET) | Release | For | Consensus |
| Oct 14 | 08:30 | Trade Balance | Aug | -$51.3B |
| Oct 14 | 08:30 | Export Prices ex-ag. | Sep | n/a |
| Oct 14 | 08:30 | Import Prices ex-oil | Sep | n/a |
| Oct 14 | 08:30 | Initial Claims | 10/09 | n/a |
| Oct 15 | 08:30 | Business Inventories | Aug | 0.6% |
| Oct 15 | 08:30 | PPI | Sep | 0.1% |
| Oct 15 | 08:30 | Retail Sales | Sep | 0.6% |
| Oct 15 | 09:15 | Industrial Production |
Sep | 0.4% |
| Oct 15 | 09:15 | Capacity Utilization | Sep | 77.5% |
| Oct 15 | 09:45 | Michigan Sentiment | Oct | 95.0 |
Top performing
industries of the week: Steel +5.95%, Marine Transport +5.69%
Worst performing industries of the week:
Home Construction -9.08%, Casino -2.81%
Good night and see you next week.
If you have questions, feel free to mail them to me.