Good evening. We are in the midst of whipsaws and despite a few recent winners, our positions have struggled lately. Particularly since last Monday (10/11) as the market has essentially paused, with the SPX trading in a 25 point range between 1,160 and 1,185. It appears this may be the theme through the elections during the first week of November. I encourage readers to pick close targets and tight stops and stick with them. Hitting singles in this environment is paramount to success and cash is also a position.
One important area to keep an eye on is the US Dollar. It appears we are due for a bounce from the recent sell-off. Commodities and commodity stocks have not traded well in recent days and if the dollar strength continues we may be in for a more meaningful correction, which in my opinion would be a healthy and necessary step for this rally to continue.
I am going to hold off on releasing new plays tonight but have provided the below trading idea. We'll have more plays for you this weekend.
Long SFD (Smithfield Foods) - A stronger dollar should lead to lower commodity prices and will help stocks like SFD. Technically, the stock is consolidating above its 20-day and 50-day SMA in a bull flag. If the stock breaks out target a move up towards the $17.50 to $18.25 area, which is +6% to +10% higher than current levels.