The week of March 15th through March 19th promises to be far different than the previous week in the markets. Why you ask? Mainly because of volume. Volume last week ranked in the top ten lightest in the previous multi year period. If I heard this piece of volume news, I would assume we are in July or August but no, it is mid March. Having said that, this week will most likely have much higher volume levels because of options expiration and the wild calendar of economic news. The coming week really has it all. From a closely watched Federal Reserve announcement on interest rates to inflation data like Producer Price Index (PPI) and Consumer Price Index (CPI). There are countless other reports this coming week that will add more volatility to the markets mainly through an increase in volume. All I can say is be ready!
Last week the markets floated generally higher. This was much like the previous few weeks since the market bottomed on February 5th, 2010. Friday was a unique day for many reasons. The video below will summarize it better but suffice it to say, it was the first day in a while that the markets gapped higher and sold off sharply. After the initial sell, light volume took over and the markets went sideways. Interestingly enough, this happened on January 11th, 2010. The chart is almost identical and on that day, I called the top on the markets, nailing it. Friday could very well be another top in the market.
There are many stocks to watch next week as swing trading and day trading should be fantastic. Options expiration always brings wild moves and next week should be no different. I will be on top of it all in the Research Center.
The top stocks on my radar next week will be Apple Inc. (NASDAQ:AAPL), Goldman Sachs Group, Inc. (NYSE:GS), Google Inc. (NASDAQ:GOOG) and Baidu, Inc. (NASDAQ:BIDU). These stocks are all market leaders and have had a meteoric rise in the last few weeks. Based on technicals and even some fundamentals, they are all short term extended and need to pullback. I have a negative bias on all four next week.
In addition, watch Palm, Inc. (NASDAQ:PALM). Earnings next week could actually help this beaten down phone maker. After dropping over 50% of its value from its highs in 2010, Palm may actually be able to help themselves by giving some clarification on future revenue and earnings. The stock has been beaten down so badly, it would not shock me to see a jump next week. I am giving Palm a neutral to positive bias next week on earnings.
I will see you all next week in the Research Center or the Intra Day Stock Chat! For those of you interested, try the Research Center out, I dare you!
Chief Market Strategist
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