Market Notes (11/15/09)

• Posted by Joe Fahmy
• on November 15th, 2009

Some observations while doing my weekend stock work:

1) Big Caps: $AAPL $AMZN $GOOG $PCLN $ISRG $BIDU. Although leadership seems to be getting narrower, I believe these stocks will continue higher into the end of the year. We could possibly repeat a 2007 scenario where the NASDAQ topped in October 2007, but stocks such as GOOG, AAPL and BIDU didn't top until Dec 2007. Either way, it's very difficult to argue with the tape and the strong up-trends in these stocks.

2) Volume concerns me. Since the NASDAQ rebounded off its 50-day in early November, almost every trading day has occurred on lighter than average volume. The good news is that after running over 100 points, the NASDAQ has consolidated on light volume and hasn't given up much of its gains so far.

3) We can't ignore the heavy volume selling of late October and the NASDAQ's resistance near the 2170-2190 area. I will feel more comfortable if we get another "follow-through" type day this week on strong volume that breaks above this range.

4) I still believe the dollar is in a downtrend, a positive for the market. Also, there is INSANE speculation in the Nov and Dec UUP 23 Calls, which makes me think the dollar won't have any meaningful rally anytime soon. Analyzing psychology can be helpful because the market tends to fool what the majority is thinking.

5) Internet security stocks: $ARST $BCSI $RAX $FIRE. This entire sector is holding up very well. $ARST is my best pick from this group.

6) Gold: As I mentioned on 10/5/09, Gold could break 1,000 and move quickly to the 1,100-1,200 area. I would continue to be a buyer of $GLD (the gold ETF) on weakness and gold-related stocks $GOLD $IAG $CDE and $TCK.

7) On Friday, the breakouts on strong volume in the following stocks keep me fairly positive on the market: $RINO $CRM $FFIV

8) Some trading ideas for this week: $CERN $DNDN $DGW $IOC $AAPL $ARST $NEU $NFLX

Please keep in mind that the purpose of this blog is to help people with idea generation. If you trade some of these stocks, PLEASE, PLEASE, PLEASE use stops. In other words, if some of these stocks turn against you and the market doesn’t cooperate…protect your portfolio! Thank you. Good luck trading!

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Tickers: AAPL, AMZN, ARST, BCSI, BIDU, CDE, CERN, CRM, DGW, DNDN, FFIV, FIRE, GLD, GOLD, GOOG, IAG, IOC, ISRG, NEU, NFLX, PCLN, RAX, RINO, TCK

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