- New Trades -


Editor's Note:

(February 08, 2015)

The U.S. market delivered a nice bounce last week. Unfortunately, it's just a bounce. The S&P 500 is still stuck in this 1,980-2,065 trading range. There is even more resistance overhead in the 2,085-2,100 zone.

Bears can argue that the market momentum has stalled and stocks are about to crash. Bulls can argue that stocks are merely digesting big gains from last year and the tidal wave of Q4 earnings results that were announced over the last few weeks.

I'm relatively surprised that stocks are holding up so well considering the overwhelming number of companies that issued bearish or cautious guidance. Plus, we had the better than expected jobs report on Friday that has fueled new expectations that the Federal Reserve might raise rates sooner than previously expected.

Overall I'm still neutral on the market short-term. Stocks need to prove themselves again, especially after all the volatile up and down swings this year. I am encouraging by the recent strength in the small cap Russell 2000 index. The $RUT is actually close to breaking out to new all-time highs, which would be a bullish sentiment indicator for the market.

Last week we saw LOW graduate from our watch list to our active play list. Tonight I'm adding two new candidates to our watch list (ASH, NOW).

Stay cautious when it comes to launching new positions. No new trades tonight.

I have updated my radar screen below.

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:

TOL, TJX, DLPH, CSX, UNP, AMBA, DVA, FSLR, GD, HAIN, WWAV, DD, WSM