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Editor's Note:

(May 26, 2014)

Broad market indices like the NASDAQ composite and the small cap Russell 2000 outpaced the rally in the big caps last week. This participation is very encouraging if you're bullish on stocks. At the same time the S&P 500 index hit a new all-time closing high.

What worries me is the S&P 500 closed right at resistance at the 1900 level. This event was done on extremely low volume while the volatility index (the VIX) hit new 52-week lows. These last two factors are not bullish. Some would argue that price is all that matters but stocks do not trade in a vacuum.

I am concerned that U.S. indices could see a pullback just as the NASDAQ and Russell 2000 start to join the rally. Fortunately, just because the VIX spiked lower doesn't guarantee a reversal. Stocks could just as easily keep climbing. That's why we are adding three new candidates to the watch list tonight (they are DOW, HAL, and TPX).

I'm also updating my radar screen.

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. In no particular order:

radar: FB, GD, BA, ORLY, ADBE, STZ, AA, GLW, CR, ALK, KORS, LUV, HPQ, UPS, FDX, EOG, SLB, MON, FSLR, FLEX, VZ, TWX, MA, V, HTS, MSFT, INTC, ORCL, UA, NKE, JCI,