Momentum Trader Report: 06/15/08

Friday’s oversold bounce was enough to close the 3 major indexes higher for the week. Although low in volume, it was nice to see the market make a stand on Friday, as all three major indexes were near key Fibonacci levels. The S&P 500 bounced near the 61.8% level.

I will be watching for the S&P to continue rallying to as high as the 1380, which is near the 50-Day SMA. If it does, I would look to get short the market at that level. But anything can happen here. This market is reacting wildly to news, and there will be a lot of news and important earnings this week, and it’s also Options Expiration.

One news item this evening is that the Saudi’s will be pumping more oil. A look at USO shows that oil was basically consolidating last week. Oil should break out of this consolidation area soon.

With the news of increased pumping, it seems the likely direction would be down. A gap down on Monday could mean an island reversal in the USO chart, which is very bearish. On the other hand, oil could go much higher if it breaks out of this area to the upside. Something to keep an eye on this week.

Last week was a great week for the stocks I have been calling my Four Horsemen, not be to be confused with Cramer’s Four Horsemen. Mine are MOS, POT, AGU and CMP. AGU put in a nice day on Friday.

I am also holding AUXL, which broke out of a bull flag last week. I had planned to make this a day trade, but it hasn’t moved much since breaking out. That’s what I get for not using high volume as a confirmation. I haven’t been stopped out, so I’m still holding, hoping for a nice move early next week.

The market should continue being choppy this week, so be careful out there.

Trade Ideas for 06/16/08:

Good luck and good trading!