Nightly Update - COMPQ, SOX, IWM, TALX, SINA, MTH, & YM

Good evening. The broader market ended up not really moving anywhere today. Nasdaq closed flat, the SPX was off 2 points, the Dow was weak and so were utilities and the TRAN. Strength remains in commodities and in small and mid caps, Internets, hard ware and soft ware, oil, and energy. There was a lot of flat lining in a lot of things. Tomorrow we will probably get end of the month window smashing. We will just have to wait and see what happens. There are no buys or sells today.


The Nasdaq Composite (COMPQ) - Weekly Chart
On the weekly chart, the Nasdaq has completed it's wave 3 to 4 correction in the shape of an ascending symmetrical triangle. The COMPQ broke out of the ascending triangle at the beginning of this year. This is a pattern that has failed on the bearish side if you look at the pattern as a failed rising wedge. Remember what fails to break down will break out. Bottom-line, the indicators are turning up and the COMPQ has taken out last week highs. The COMPQ is now out performing the SPX. A lot of front runner momentum stocks are on the verge breaking out, such as SINA.

The Semiconductor Index (SOX)- Daily Chart
The weekly chart of the SOX shows that it is currently in a wave 3 to 4 pull back. The moving averages are holding up nicely in a bullish fan, and we are just waiting on a reversal to the upside. It is highly unlikely that the SOX will cross the 200 week moving average. Consequently, I added SINA to the portfolio. Indicators and oscillators are look to be bottoming. It is the first time in a while that the SOX looks decent, even though the sector has been underperforming.

Russell 2000 iShares (IWM) - Daily Chart
The daily chart illustrates that the IWM has traded in a nice uptrend channel since it placed it's lows in October at $60.91. Today the IWM made new 52 week highs at $76.24. As you can see from the chart, indicators and oscillators are bullish.

Talx Corp. (TALX) - 60 minute Chart
This is a frustrating stock. TALX was so ready for a break out when we bought it, and then it just didn't happen. Instead, TALX just got an extended correction. However, the pattern is not broken. Therefore, we just have to sit on hands. The 60 minute chart and daily chart of TALX is a good example of what defines an ABC correction. Previous ABC corrections if you look at the daily have consistently held the uptrend illustrating the fact that the pattern is not broken. Confirmation of a larger pattern break out is not until $33.69.

Sina.com (SINA)- Daily Chart
SINA is on the verge of major breakout if it can take out $28.00 and stay above it. It needs to take out the trend line going all the way back to 2004. SINA has been strong for the last 4 days. Furthermore, SINA has gone through all of it's corrective modes. If SINA can break out a lot of other stocks will follow. This will bring a lot of moment into the stock. It also has high short interest. However, it will probably back test the lows.

Meritage Homes Corp. (MTH)- Daily Chart
The daily chart of MTH has a conservative short term price target $65.00. Here you can see that the daily chart looks like a head and shoulders pattern. However it is a false pattern, because we never took out the neckline in the 57's. The most current pattern is a bullish falling wedge reversal. The Breakout point is $58.50. Medium term price target is at the 50% Fibonacci retracement level at $74.00.


Dow Jones Industrial Average Futures - Daily chart
The YM chart illustrates that it has broken out of the continuation diamond pattern and is now in the process of forming a bull flag as it pulls back from the highs placed earlier this year. The stochastics are bearish. Nevertheless, the INDU target remains 11350.