Editor's Note:

(August 6th, 2012)

Looking at the stock market over the last several weeks all the gains seem to be from short covering. While that may not inspire much confidence the S&P 500 index is actually producing a bullish trend of higher lows and higher highs.

I'll be honest, I do not have a lot of faith in this "rally". August and September are historically bearish months for the market. With the unsolved issues in Europe, the geopolitical tensions in the middle east, the U.S. fiscal cliff and a presidential election coming, I don't see a lot of catalysts to drive stocks higher.

If I had to guess the market will most likely be lower by mid to late September. Thus I'm not in a rush to launch new positions here. Now that doesn't mean we won't open new plays but we just need to be more selective. I have added three new candidates to the watch list this evening.

In addition to the watch list, here is a list of stocks on my radar screen as possibles to keep an eye on:

FTR, XHB, MMM, CVX, RIG, TGT, ROST, CP, SCHW, NVDA, VOD, XOM