Welcome to the recap of Monday's MarketWatchers LIVE show, your antidote for the CNBC/FBN 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. Shows are now recorded and available until the next show airs! Go to the Webinars tab or click here.
Information abounds in our Monday/Wednesday/Friday 12:00p - 1:30p shows, but the MWL Blog will give you a quick recap. Be sure and check out the MarketWatchers LIVE ChartList for many of today's charts.
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What Happened Today?
Every Monday, Tom and Erin look at which charts are shaping up as "ones to watch" for the week, but to start, they reviewed last week's Monday Set-Ups "picks", LKQ for Erin (up 0.26% on the week) and CINF for Tom (down 1.5% on the week). Although Tom's pick didn't pan out, it is a bonus as the chart is now shaping up even more positively according to Tom. Today's Set-Up picks were Analog Devices (ADI) for Tom and Erin picked OraSure Technologies (OSUR). To read more about Tom's thoughts on ADI, be sure and read his blog from this morning. Erin liked the breakout from overhead resistance, the nearing PMO BUY signal and positive confirmations on the price move by the OBV and SCTR.
Earnings Spotlight: Tom took a look at II-VI Inc. (IIVI) which interestingly was on both Tom and Erin's Monday Set-up lists from last Monday. Neither actually picked it as their official set-up for last week, but it was fun to revisit it. It reported its earnings back on August 7th. The chart is getting even more interesting with the cup and now a test of important support. Tom pointed out that the volume wasn't off the charts during the original decline, but it did pick up after bottoming. It still looks good.
"What Would You Do?": We had a request in the feedback survey to bring this segment back. The premise...Tom and Erin present one chart to audience with no hints and ask viewers to take a moment and tell us via the chat box in Livestream what they see and what they would do. Below is the chart. For fun, we'll put the "answers" everyone came up with underneath the chart so you can play the game too. First is the unaltered chart:
Answers given in the chat box were mostly bearish with most saying they wouldn't get in until it pulled back as price is overbought. Others pointed out the double-bottom and one viewer also noted a possible cup and handle preceding this breakout. Those that were bullish said they would like to see a pullback but would be okay getting in if price broke out.
Based on the chart above, Tom was cautiously bullish. Cautious mainly due to price being at resistance. He said that the MACD looked good but RSI and Stochastic were overbought, though they can stay in overbought territory a fairly long time. He said he wouldn't get it in it now, but if he saw a pullback to the rising 20-EMA, he'd probably get in.
Below is the chart as Erin annotated it. She sees a double-bottom that has executed. She liked that price had consolidated above the neckline in preparation for this breakout to new highs. Based on the height of the pattern, there could be a 7% run up should it fulfill the double-bottom pattern. There could be even more mileage off the short-term flag formation, notable in the thumbnail. The bull flag has executed and the height of the flag formation is longer than the double-bottom pattern's height. There is bullish confirmation on all of the indicators.
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. Symbols reviewed today: CSIQ, DVAX, ARRY, WOOD, T, COPX, PKG, WCG, EWA and EMQQ. You'll find all of the charts in the MarketWatchers LIVE ChartList, located at the top of the MarketWatchers blog homepage.
DecisionPoint Report: On Monday Erin analyzes DP indicators to give us a heads up on the market conditions as we start the week. She also reviewed the "big four": Dollar, Oil, Gold & Bonds. Don't miss the DecisionPoint Weekly Wrap by Carl Swenlin on Saturday morning to get the scoop on market action the prior week and find out what the indicators are suggesting for the future. Erin basically went through the charts that Carl posted on Friday night in the DecisionPoint Weekly Wrap for 9/8 and added her own thoughts. Additionally, she will be logging her comments into the DecisionPoint blog on Tuesday in her latest DP Alert article.
Mailbag Segment: Each show Erin and Tom answer questions received via Twitter, Facebook and Email. There wasn't much time at the end of the show today so Tom discussed that he trades off of and picks 90% of his Monday Set-Ups from his "Strong Earnings" ChartList. While it isn't published, he gathers the information on zacks.com and earningsbeats.com to develop the list. Sometimes he runs scans on the list or like today, he just looks at each chart one after the other to find the ones of interest. Erin noted that you can find her scans for Monday Set-ups in the DecisionPoint blog. Just look up "PMO Scan" in the search box on StockCharts.com.
It's a Wrap! In closing Tom and Erin discussed how today's big rally had changed their views on the bearishness of the week ahead. If you'll recall, both of them and the audience were in agreement that the market would finish down this Friday. Erin isn't ready to jump on a positive finish for the week, she suspects with the VIX numbers getting smaller and her short-term indicators (Swenlin Trading Oscillator for Breadth (STO-B) and Volume (STO-V)) have bearish leanings. Tom is feeling better about the week, but is looking for mostly sideways or a slight finish higher for the SPX.
Tune in on Wednesday at 12:00p - 1:30p EST on 9/13. Erin will announce the results of the latest Twitter poll. Tom and Erin will be answering more mailbag questions, doing another Ten in Ten segment as well as regular market updates and indicator reviews!