- New Trades -

Editor's Note:

(April 06, 2014)

I am not adding any new trades tonight. Our LeapsTrader watch list had a very successful week with four stocks (AGU, CAT, NS, and WDC) all graduating to our active play list.

In tonight's market commentary I noted that the S&P 500 and the Dow Industrials just hit new all-time highs this past week. Yet why does the market feel so bearish? That's probably because of the flood of bearish reversal moves we saw on Friday. Plus the NASDAQ and the Russell 2000 indices are both underperforming and down about -5% from their recent highs.

This divergence between the major indices is not encouraging. We're also on the verge of Q1 earnings season. Expectations are low and I expect any company that misses to see its stock punished severely. This does not make me enthusiastic about launching new positions tonight.

The market is overdue for a normal correction (-10%) but many stocks have already corrected this much or more. In the aftermath of earnings season we could find stocks significantly lower. That's a good thing if you're looking for new trades. We just need to be patient. We may not see any real opportunities for another three to six weeks.