Editor's Note:

(October 13, 2012)

There was no follow through on the early October rebound in stocks. Instead the market has reversed. We're seeing some of the major indices like the S&P 500 and the Russell 2000 index flirt with breakdowns below support. The NASDAQ is also testing support at 3,040. Considering that Q3 earnings results are likely to disappoint investors we could see the sell-off continue.

I looked at nearly 1,500 stocks this weekend. Nothing looks very attractive right now. Honestly, it looks pretty ugly. There are plenty of short-term bearish candidates. Yet nothing I would buy a dip yet. That is probably the upside of this market pullback and any weakness inspired by the Q3 earnings season, is that we should see a better entry point brought about by this decline. Unfortunately, the decline is not over yet.

I suspect we will see stocks trend lower for another week, maybe a week and a half. Then as we approach the end of October and the end of the fiscal year for many mutual funds, the market will likely rebound higher. Thus, tonight I do not see any new trades. We did add two new candidates to our watch list. I have also updated my radar screen with a number of new stock symbols.

I would keep an eye on FAST and MNST. FAST might be a buy on a close above $46.50 or $47.00. MNST might be a higher-risk buy on a close above $60 or its 200-dma. I would also keep an eye on the coal stocks. Many of them have formed what appears to be a significant bottom over the last few months.

Radar Screen:
Here is a list of stocks on my radar screen. These have potential to be LEAPS trades down the road if the right entry point presents itself:

FAST, GS, ANR, RYL, ESRX, HAS, SCCO, WYNN, PM, MCK, WMT, LLL, MNST, EFX, MAT, WAG, BTU, BRK.B, XCO, OPEN, VLO, NWL, CVC, CL, AON,