It has been quite a news cycle recently for the world’s stock markets starting with all of the unrest in the Middle East resulting in rising oil prices, the US Government in budget crisis, European debt concerns still relevant and now I wake up this morning and see that Japan was racked with an 8.9 earthquake creating tsunamis throughout the region. It is amazing that we are only down 60 handles from the peak as I write this.
I discount news as a technician and I truly believe that news serves me one purpose and that is to get my stocks to entry levels that I desire. As of now we are through the 50 day Moving Average (NYSE:MA) on the S&P June contract, the trend is slowly changing. The next shoe to drop could be a “Death Cross” if the 20 day MA moves through the 50 day MA. I am also watching RSI to see if we get oversold which might be a good place to nibble to the upside.
The most prudent play as of now is to be short names that are technically ugly and be long names that are technically sound. My long list would include: CLF, GE, IBM, MCD, DELL, CTXS. My short list is: X, SNDK, FCX, NVDA, AIG, CELG, AMGN, AKAM. Neither of these lists are complete but are my best and worst looking stock charts.
Technical support levels on the S&P June contract are as follows: 1278.75, 1269, 1257.50. Resistance is now 1293.50, 1301, 1312.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.