Nothing But Noise

Like most option expiration weeks, there was a lot of noise on several fronts, but the trading action itself was pretty much as expected - i.e. lots of choppy action and another 11:AM Tuesday turnaround move.

Tomorrow morning we have the "there's no inflation to worry about in America" CPI report, weekly oil inventories and enough Fedspeak to give you a headache if you don't already have one by now. In the great words of Jesse Livermore - "it's not the thinking that makes the money; it's the sitting." We'll, keep those earplugs in and get those summer lawn chairs dusted off.

A Simple Moving Average Screen

Using IBD's custom screen wizard, here's a fun little screen I like to run at least once a week.

This morning I searched for stocks which are trading 50% above both their 50 day and 200 day moving averages. This screen always shows where the action is and frequently can point to "reversion to the mean" short setups. Few stocks that maintain the level of sheer upside momentum to stay that far above their respective moving averages for long durations.

Here are the 12 stocks that meet that criteria this morning:

This is a simple but effective screen. I always find it interesting to see what shows up on this list and those of you who desire to trade short term would be smart to add a screen of this nature to your arsenal.

Healthcare Investment Opportunities

As I promised last week, I spent some time over the past few days focusing my stock screening tools on the healthcare sector. It is my view that sector is relatively undervalued and it presents some attractive longer-term opportunities with a 12-24 month time horizon.

The goal here is to create a long-term healthcare watchlist composed of the sector's best risk/reward opportunities. As of today, my healthcare focus list is composed of the following 15 stocks.....[READ]

Retail Sales, M&A, & Fedspeak

Good morning. Premarket futures have been volatile this morning, but currently indicate a positive start.

In focus this morning include a better than expected retail sales report, disappointing second quarter guidance from Wal-Mart, and the Hewlett-Packard/EDS deal. The dollar is also trading higher as oil declines.

Premarket gainers: CSIQ, FSYS, ULTR, EMKR, PMFG, KNXA, FLR, CSUN, FSTR, ENER, FWLT, GIGM, WRNC, MEDX, SOLF, BOOM, IOMI, PAL, GIGM, RICK, NTWK, BE, BYI, GTI, & PBR.

Premarket losers: TRLG, NUAN, ABP, DFR, DT, TBSI, OPWV, PNNT, DISH, HOKU, LDK, VVTV, NAT, & WMT.

At 10:AM we have the March business inventories report and lots of Fedspeak today from Plosser, Yellen, Hoenig, Fisher, and Evans.

Like yesterday, traders will continue to trade on the dollar, oil prices, and the respective technical levels that we've been trading around. Much like premarket futures, I expect to see more choppy trading. With Friday's lows as support and last Tuesday's highs as resistance, we'll likely stay confined within this trading range for some time.

Have a terrific Tuesday!

Buy The Dippers Return

After last week's pullback, the buy the dippers got busy.

Once the S&P held its 20 day moving average (now support), confidence surged as buyers moved back into internet, real-estate, consumer services, retail, regional banking, and technology. Merger talk surrounding Hewlett-Packard (HPQ) and Electronic Data Systems (EDS) seemed to make people giddy for excitement along with a bear trap reversals in MBIA (MBI) & Fedex (FDX).

If you're shorting this market with everything you've got, patience has to be running quite thin especially into what most expect will be better than expected inflation data (wink, wink) and another options expiration Friday. Hoping for government data to spark a selloff hasn't been a money trade for some time now. Will this week be any different?

The one thing you can count on is more volatility as we get closer to Friday. And, I make that statement with full knowledge that the VIX is sitting at this year's low. The good news is that we have a well-defined trading range to work with using the recent highs and lows from the past week.

See you tomorrow!