Last week’s trading action was positive, but market bulls psyche is still a little rattled. Keep an eye on the small-caps; they were very strong last week. I use that index as the proverbial Canary in the Coal mine.
Watch the $IWM, if it breaks $116.5 on the downside it would be a red flag for further downside pressure. Also keep an eye on the S&P 500. A break of the $202 on the $SPY would become a break of major support and would flag negative price action to the downside.
Expect this choppy trade into the end of the week, but look for upside strength beginning in February.
Finally, I put out our list of the three most bullish stocks for the next 50 days: Celgene Corporation ($CELG), Spirit Airlines, Inc. ($SAVE), and CVS Health Corporation ($CVS). If you go to http://www.tradespocn.com/weekly/ideas.php, we have three comprehensive trade reports, probability calculations, and a look at the seasonal chart action with our price predictions for the stock over the next week.
Have a great trading day.
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