DJIM #13 2011

Last week's 2.74% SPX recovery rise is pretty well summarized last Journal.  Friday’s action did not nothing to deter from the trading premise here with tech earnings being the missing link in a move higher post consolidation early in the week.  The ease the market broke through 1314 ‘R’ in early trading  before wavering some in the afternoon makes you think it’s just a question of time before we test February highs. There’s a cluster of “R’ around 1313-1319, but once a close occurs over, the market will have higher sights in mind and it should happen this week.  Simply, the recovery reversal of nearly 70pts trough to peak is only 7-8 days old and many are behind the ball on it (as in surprised).  This coming into a month end/Q end is where a PA pill (performance anxiety) will likely be swallowed by managers to play catch up.  This non-participation is also evident in the rally’s volume, this negative may turn into a positive as some larger managers may chase.  As Traders you can’t predict any further macro shocks, so you work with what’s in front of you and window dressing is it as we enter a corporate quiet period before next Q earnings.  A few notable eco data points Friday (Global PMI’s,NFP#) coinciding with QE2 hitting the street.

Shadowlist

• Momentum/ earnings/ winners of ’10-   The Nazzy/ R2K outperformed the SP by a full 1% this week, this sums up this Shadowlist group as corporate profits led the way, so plenty of linked names from leaders and oversold opticals to look at for more trading. Networking related names were weak post AT&T-T-Mob deal, but private Lightsquared is drawing attention as it makes deal after deal .  This equals more network build up, not less.
• Commodities- as per recent activity, coals,  GTLS, CRR,  MCP, names noted most here keep on trading well.
• Consumer- retail/lux DJIM names hanging in well, FOSL  keeps making new highs.  Some rotation late in the week into our casino names (WYNN, LVS)  to watch further.