Do you buy or sell now!! Markets where are they headed for Q4 and our favorite stocks - Trucharts.com Blog week ending 10/9/2015

Trucharts.com Blog - week ending 10/09/2015

Do you buy or sell now!! Markets where are they headed for Q4 and our favorite stocks - Trucharts.com Blog week ending 10/9/2015

Well the title says it all - what do you do now that we have had this wonderful rally this week - the move (to us was expected) has been decent and we had stated the markets would move higher after the retest and elevated VIX. So now the VIX is trending down, material stocks have been up, gold has been moving up, right after the Fed announcement and energy moved higher. Markets moved higher as junk bond yields recovered from an oversold condition - be mindful - there is a very high correlation between JNK (etf) and the markets. This is the correlation related to the appetite for riskier assets - specially high yield junk bonds. Based on the charts for DIA and SPY - included here below - we expect the markets to go higher as technicals are still trending higher - see the MACD, RSI and the 200d SMA looks like where we could be headed which would be 17500 for DJIA and 2050 for the S&P500 - these would pose as high resistance for the indices and huge overhead supply. We believe this is just a bounce from an oversold condition with weakening fundamentals, remember earnings drive stock prices. But there are signs of bubbles everywhere and we would be taking profits and sell into the rallies.

Here are weekly charts for DIA and SPY:

 

Now we are heading into the earnings season for Q3 and forecasts for Q4 - we will have to see what the companies say. From FACTSET news we learned that it would be the first quarter since 2009 for back to back declining earnings quarter over quarter. In addition, FACTSET noted that forward P/E is around 15.9 vs average of 14.1 (5 year). We expect big declines in energy sector along with impact to companies earnings with global exposure due to strong dollar. Well Ms Yellen is going to make it easier by driving down the dollar with the Fed's non stop money printing and ZIRP. We have deleted the earnings calendar and estimates from our site due to very low usage. We will try to see if we can get this data from some other providers. You can check our realtime news page which has an earnings section and dates for reporting.

If you own a position in TSLA - please be mindful - this stock on weekly chart looks like it headed a lot lower and has formed a nice topping pattern. It is at a very critical juncture - the 100 week SMA. Here is the chart:

Charts for gold miners and GLD are looking good for the short term - trend is higher - good for some short term trading. See chart for GLD here - not convincing enough for me. Volume is not strong - but looks like it could go to 50w SMA around 113.

Here is a chart for BABA - we went long at 62.7 based on the buy signal from our site and will close the position soon - very likely this week. As you can see the buy signal was strong and stock is still heading higher - a very unique feature from our site. Please read DISCLAIMERS on our site and our site policies. We always strongly recommend you do your own due diligence and if have never invested in stocks - these are very speculative stocks and trading inherently is not for the risk averse. Please consult your financial advisor before making investment decisions - our recommendations are meant for seasoned traders and experienced professionals.

Please make sure you are aware of holdings in your portfolio and the earnings reporting date - this is available in Yahoo and buy some cheap protection via puts maybe 10% below the current stock price - to limit your risk.

We were also long MO and plan to stay long - strong chart and did a breakout on this past week to a new high from a consolidation pattern.

Now on to our favorite stocks for trading this week and ones we will be taking positions in. These are the stocks we will be trading this week:

http://www.trucharts.com/stockview.aspx?TICK=VRX
http://www.trucharts.com/stockview.aspx?TICK=LLY
http://www.trucharts.com/stockview.aspx?TICK=MO
http://www.trucharts.com/stockview.aspx?TICK=YUM
http://www.trucharts.com/stockview.aspx?TICK=AAL

Please take some time reviewing these charts above and monitor these stocks. There are many others but we try to limit our choices to what we think have the highest probability of making money.

Please also take some time to review our site and do subscribe - as we said for all the services we provide, we know we offer the best value for money. We cannot survive if we do not have paying subscribers and we need your support to make the site a sustaining entity. People do not work for free and we do not get anything for free. But our users use our site entirely free and do not take advantage of what we truly offer to help you make money in stocks. 

Again your support is very critical - it is a mere $9 per month. If you cannot afford that then please do not trade stocks. You pay that much in commission and will very likely lose money also.

Good luck trading.

Trucharts team and Founder/CEO