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We went bullish after Thursday’s action and Friday individual stock action further confirmed that. We saw many quality stocks reset themselves and they appear ready to make a move going into quarter end. Granted the next support levels are about 2-3% lower but from the looks of the former leading stocks movement, this looks to be a higher probability entry point. Volume was up sharply and on an up day and this is something we haven’t seen in some time. The only problem is the heavy volume was due to the rebalancing of the Russell indices.
For better or for worse the financial reform bill is getting passed so the uncertainty brought on by that process could be behind us. This led to some short covering and a move in some of the financial names. If that area can catch fire followed by a break above the 50 day moving average on the EUR/USD along with quarter end window dressing, we have the potential for a huge rally. If we are wrong we will know in about 2-3% when we hit the recent lows. We had some setups trigger on Friday and we have a few more good looking setups with some disclaimers
Due to market conditions these setups are still extremely risky. It’s probably not a bad idea to wait for further confirmation of a short term bottom but for those looking for some trade setups the following should do well if the market rallies.
If you are looking for some trades in this risky market we would go with the following stocks trading above the following prices.
Disclosure: NO POSITIONS