Intermediate-Term Report

After a shortened holiday week not much has changed for the market, or for this cautious bull. With a mixed fractional performance that resulted in a slight loss of .41% to a gain of .16% for the Nasdaq Composite and S&P500 respectively--capped off by a rather lackluster finish in Friday's trade, this cautious bull remains vigilent within the market's intermediate downtrend.

The last four days of trade amount to what many technicians would classify as a classic consolidation week after last Tuesday's FTD in both of our major market averages. That is typically a good thing, but considering Friday's rather tepid attempt to break above its recent range after a plethora of positive releases--and this cautious bull has one more reason to heed the proverbial yellow flag of caution. If we also consider the fact that most of our quality, leading growth stocks have failed to move materially higher past their pivots during the past two weeks, and that the vast majority are still in need of more constructive base work, then we have more than enough compelling evidence to maintain a defensive posture.

As stated last week and still very much relevant to the market today, 'While the Follow-Thru-Day does lend itself to potential trading in our leading stocks--within the context of the market's intermediate downtrend it is akin to winning an individual battle in the context of an ongoing war. At this juncture, coming off a market top and establishing an intermediate downtrend takes precedence over a FTD, as far as trading breakouts are concerned in this analyst's opinion. In strategy terms this means that during our current market phase I look at each candidate even closer for possible flaws before establishing positions. For those stocks that do look worthy of an initial entry, the philosophy of trading 'light and tight' and taking quick, partial profits on a piece of any profitable trades is still viewed as the most realistic way to trade breakouts for the time being.'

It is our own personal risk tolerance levels within the market waves that ultimately dictate how well we fare during both the great investing climates, as well as those that will be considered less-than-perfect 'sailing conditions. When the breakouts stop triggering consistently--it's time to focus your energies on existing positions. Bottom line--as technicians, we know where we like to make adjustments, either adding to, or decreasing our portfolio, but it doesn't mean that the decision is the same for every trader. While the markets are sailing high, we realize that between the peaks, troughs do exist, and it's always in our best interest to stay prepared for whatever comes our way.

Swing Trade Setups: Potential position plays that are expected to last 2 to 7 trading days, using key technical levels for entry. These stocks do not necessarily meet all of our stringent Intermediate Term requirements, but are demonstrating many of the same strong criteria. Due diligence on the individual traders part is an absolute requirement!!! Proper money management rules are emphasized in scaling out of profitable positions, as is, the setting of prudent stop losses, on the establishment of any positions taken. The list is not maintained on a weekly basis as trades are considered, at time of entry, short term in nature.

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IT Watch List Action:
As always, the search goes on for top stocks meeting our fundamental and technical criteria, but issues may still show 'flaws.' The most common 'flaw' being ROE, according to strict IBD-style investing . Always do your own homework before entering a trade .Stocks forming bases or handles are monitored, and put on our watchlist, and then moved to our position list of recent breakouts, on price triggers above resistance pivots.

Stocks Building A Base

Stocks Forming A Handle Or Pivot Base

Recent  Breakouts From "Base & Handle" Lists

Breakouts that may require extra diligence. Those issues that are near pivot entries or 15% or more, from established highs.
This list accounts for those issues that have performed strongly, but may require position management due to deteriorating technical condition before pivot price is reached. If an issue pull backs 36% or more from highs, the stock will be removed from our lT lists, so we can make room for more compelling trade candidates.