- New Trades -
(August 24, 2014)
You might notice a theme in this week's LEAPStrader newsletter. The focus is in the S&P 500 and what could be major psychological resistance at the 2,000 mark.
It's certainly possible that the S&P 500 rallies past 2,000 and doesn't look back. On the other hand it could prove to be a significant roadblock that takes multiple tries to push through.
Tonight I would rather err on the side of caution. The bull market is getting pretty old. The S&P 500 has gone more than 1,050 days without a normal -10% correction. Typically the market sees a 10% pullback about twice a year.
We had a very successful week for the watch list. CELG, CMI, and LMT all graduated to our active play list. I am not adding any new trades or new watch list candidates due to concerns about the wider market. The NASDAQ's relative strength and recent breakout higher is encouraging but let's see how the S&P 500 handles the 2,000 level.
The week ahead of is unofficially the last week of summer. Trading volumes will be super low. Many market participants are not actively trading in the market today because they're on vacation. The low volume tends to allow for increased volatility (both directions).
I have also updated my radar screen below.
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:
CF, UAL, KOL, ZUMZ, LEA*, DLPH*, EEM, NKE*, PRI, EMES, ORLY*,
My favorites on this list are the auto part stocks. LEA, DLPH and ORLY all have a lot of potential both technically and fundamentally. If these stocks breakout and close above resistance it will look like a bullish entry point.
I've been watching NKE for a long time and really want to hop on board if we see it close above resistance at the $80.00 level. It could portend a run towards $100 or higher.