Well, Friday rolled around and the Dow fell 300+ points, and as I mentioned earlier this week – there were already indications that a market correction was possible. the S&P 500 fell below its 50 day MA and there is a lot of chatter that we might be in a Wave 4 correction (see below, courtesy Joanne Klein Above the Green Line).
There is probably a high chance that the markets will continue to fall next week. Best thing to do at this point is to consolidate positions, raise cash, hedge and have tight stops. There are lots of great stocks to buy, but best to see how the market price action evolves.
A lot of the picks that I mentioned in my last post are now on hold. Charts will be updated once I think there is a potential buy signal. Regardless of the crappy action of Friday, I managed to pull two nice winners – ARIA And UGAZ, both 30%+ winners!
At this point, I sold CAMT, UGAZ and half of my ICLD. I am holding half my ARIA for a continued run to $10, GOGO (Although I’m very close to selling it) and the remaining ICLD (which may be pulling an ARIA here).
UGAZ Cup and Handle B/O Results:
MSFT – breaks out of the wedge on great earnings
AAPL Cup and Handle on Weekly – Use Caution!
Given its ER, any thing can happen, but the cup and handle set up looks nice here. Safest way to play this would either be to to grab some deep in the money options or to just simply wait until the price breaks out of the handle (over $560).
ICLD – pulling an ARIA? Some pattern similarities, on close watch:
ICPT – Range play? Need to use caution!
A lot of the plays I mentioned earlier have been falling out of their channels but getting caught by the next layer of support. ICPT might be doing this as well. On watch for a potential range play.