August has produced an amazing roller coaster ride for stocks. This week's action with the up +5% one day and down -5% the next is nearly impossible to trade. I am impressed that gold held up as well as it did in spite of the news of higher margin requirements. Looking ahead to Friday it is anyone's guess if stocks will see any follow through on Thursday's big bounce or will stocks roll over again.
We are not adding any new option trades tonight. It will be interested to see if traders buy stocks into the close on Friday or do they sell them because they don't want to be long over the weekend.
Here is a list of stocks I'm watching as potential bullish trading ideas if the rebound continues:
V, CERN, WFM, COST, RRC, MCD, CAT, WYNN, WLT, HUM, and FMX.
I am almost tempted to buy CAT now thanks to its bounce from the long-term trendline on the weekly chart but if stocks roll over again we might see a better entry point closer to $80.
Weekly Chart of CAT: