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Editor's Note:

(July 13, 2014)

We saw volatility jump last week thanks to some market declines. Yet the VIX remains just a couple of points from its seven-year lows set last week. In spite of the market's weakness this past week the S&P 500 index is still less than 1% from its all-time high.

Have we seen the start of a market correction? Possibly. The key could be the small cap Russell 2000 index, which has reversed sharply at resistance and continues to underperform the rest of the market. It's the small caps and momentum names that are having the worst time of it. There are several groups in the market, like transports and semiconductors, that remain strong and still near their highs.

There is no correction yet in the S&P 500 and the NASDAQ composite. I suspect investors are waiting on Q2 earnings. The earnings reporting season begin this past week but the pace of announcements will pick up speed significantly this week.

The key will be corporate guidance. What does management expect in the second half of 2014. Are they confident or are they cautious?

The next couple of weeks could be a market top or they could provide the energy needed to propel stocks higher if corporate guidance is good enough. Given the pivotal nature of where we are in earnings season I am not adding any new plays tonight.

I've updated my radar screen. My favorites have an asterisk next to them.

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:

AA, CSX, PEP, CCE, GM, F, XRS, TRLA, EOG, APA, SLB, ORLY*, SAVE, SBUX, GMCR, COST*, ALK*, FDX, BRK.B, LEA* GILD, NKE*, AAPL, BHP, BBRY,