Slim To None

You
know scanning the universe of stocks for potential
trading opportunities is a difficult task in an environment like the
one we have been facing recently. In speaking with my brother who
trades professionally for a firm based in New York, he and his
associates have said this one of the most difficult markets to get a
handle on.

The majority of stocks
making news highs have been in the Savings & Loans and Regional
Bank groups. I have looked at a number of these and found some viable
candidates to trade. The Banking Index ($BKX.X)
appears to be forming what Edwards and Magee coined a Right-Angle
Broadening formation.

The formation is quite
bullish if the index could take out the multiple top high. Note how
the Relative Strength line broke out before the index.

Hudson River Bancorp (HRBT)
has been creeping up the right side of its 3 month cup. The savings
and loan stock has been showing some nice earnings growth (50%, 22%,
28% and 74%) with no debt and low institutional holdings.

Looking at the
Electronically Traded Funds the WEBS-Malaysia Benchmark (EWM)
moved higher 1.4% after a one day pullback to fill the gap.

The Cyclical Transportation
Sector (XLY)
looks like it is forming a high level symmetrical triangle and looks
poised to move higher. The fund edged up 1.1%.

The
WEBS-Belgium Benchmark (EWK)
fell 2.3%.

Remember that all securities
are risky. In any trade, you should always reduce your risk by
adjusting position size and placing open protective stops where
you will sell your long or cover your short in case the market turns
against you. For an introduction to combining price stops with
position sizing, see Loren’s lesson, Risky
Business.

Greg