Welcome to the recap of Wednesday's MarketWatchers LIVE show, your antidote for the CNBC lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market with live market updates and symbols that are hot.
Information abounds in our Monday/Wednesday/Friday 12:00p - 1:30p shows, but we will try to incorporate a few charts that you found the most interesting during the show (or that we found most interesting!). Your comments, questions and suggestions are welcome. Our Twitter handle is @MktWatchersLIVE (use #MWLSCC to join the conversation), Email is marketwatchers@stockcharts.com and our Facebook page is up and running so "like" it at MarketWatchers LIVE.
What Happened Today?
Market Update/Economic News/Earnings:
Every Wednesday, Tom and Erin start the show off with important earnings announcements, economic news and developing news in the major markets. One of the charts Tom looked at was Electronic Arts (EA) which posted an amazing earnings beat. Interestingly, it was listed improperly on Zacks, but we were able to clear that up quickly looking at the chart:
More Monday Set-Ups: Since we had technical difficulties and were unable to air on Monday, Tom and I decided we would add a few more to what we posted yesterday. I'm patting myself on the back for publishing Surgery Partners (SGRY) yesterday as a good set-up. Check out the chart today! They don't always turn out this way, but when they do, enjoy!
The move may've already happened for SGRY, but my PMO Scan came up with a very interesting candidate today. Myers Industries (MYE) caught my eye because of the nearing PMO crossover BUY signal and the clear double-bottom pattern. Today price broke out above the neckline and if the pattern executes as expected, I'd look for a target around $18 - $18.50.
Tom continues to follow Caterpillar (CAT) very closely as well as Network Appliance (NTAP). Here are his annotations:
Market Updates: Erin reviews the intraday action of the major indexes, sectors and the "Big Four", (Dollar, Gold, Oil & Bonds) during the regular market updates on the half hour. Charts to watch are UUP (Dollar ETF) and the VIX. I wrote about the low VIX in my last DecisionPoint blog entry which you can find here. As far as the Dollar, UUP needs to execute the bullish declining wedge on this next leg up or the pattern is in jeopardy. When price gets too close the apex of triangles and wedges, a breakout or breakdown loses significance as "drift" from a pattern is increased. Indicators are looking better for UUP, so this could be the rally breakout on the way.
Agree or Disagree? In this regular segment, Tom and Erin will look at two charts and agree or disagree. Erin posts the Agree or Disagree polls on Twitter to find out what you think. The current Twitter poll is here. Today's topic was the energy sector, specifically XLE, the energy ETF. Both Erin and Tom were bullish. The question is, "Would you buy it today or sell it if you owned it?" Tom and Erin said, "Buy."
Sector/Industry Group News: During Tom's sector and industry review, he pointed out that the XLY had become of the leading sectors relative to the benchmark S&P 500. He drilled down and looked at all of the industry groups within the discretionary space and one of his favorites was restaurants & bars ($DJUSRU). This industry has been climbing vs. the XLY, while the XLY has been climbing vs. the S&P 500. So this is a group that has his attention for trading.
Ten in Ten Before One: In this regular segment, Tom reviews ten charts in ten minutes with Erin's comments and comments from the Twitter "peanut gallery" peppered in there. Send in your symbol requests via Twitter (@mktwatcherslive) before the show and we'll try and add them. If we missed them this show, we have many of them in the queue for Friday. Tom looked at the following: GM, EWS, ECPG, KSS, BOX, CJ.TO, LUK, QLYS, FCG and MU. One of his favorites was Qualy's (QLYS), which recently had broken out on very heavy volume and cleared early October price resistance near 39. While QLYS is overbought and could use a bit of short-term selling, momentum is quite strong and that suggests that any selling even will likely be fairly short-lived. Price, gap and rising 20 day EMA support all reside in the 39-40 area, representing the best reward to risk area for entry.
Mailbag Segment: Each show Erin and Tom answer questions received via Twitter, Facebook and Email.
In discussing seasonality, viewers wanted to know whether the "Sell in May, Go Away" phrase is accurate. Tom went through some of his seasonality analysis and basically came to the conclusion that it's more accurate to say July is when you might want to go away, and then rejoin in September. Well, there isn't a phrase for that, but one of our viewers tweeted, "Take a sigh in July, but set your clock to remember the end of September". Might need a little tweaking.
Another question: "How do you determine an exit strategy on a stock that is making new highs?" Tom discussed looking for MACD divergences and Erin explained that she likes to consider chart patterns as well as divergences.
It's a Wrap! Both Tom and Erin are overall bullish on the market short-term. Look for our Twitter polls at @mktwatcherslive.
Looking Forward:
Tune in on Friday at 12:00p - 1:30p EST on 5/10 for the results of the "Agree or Disagree" poll as well as our popular regular segments, "Ten in Ten to One" and Mailbag.
