Daily View Thursday 14 January 2010...

Today was a pretty dreary day in the markets, to be honest. The market drifted with a bullish bias as it awaited earnings reports from Intel after the close and JP Morgan tomorrow morning. Besides those, there's nothing else of interest reporting for tomorrow morning that I know of. Tomorrow is also options expiration, and tonight is index options expiration.

Intel popped in the aftermarket briefly, but it's since settled down and is more or less flat from where it closed.

I took my starter in CRE today. I left room to add should it fall back towards $7.75 (50-day EMA) and again should it fall back towards $7.25 (200-day EMA). Conversely, I'll add more on a breakout above $8.25. The stock got perky today and supported my theory from yesterday that the 50-day EMA was now becoming support instead of resistance. Remember, this is a special case stock.

We also had a pair of updates to screen scores today. CEU became a 0/4, as it decreased from 91% to 85% on the Motley Fool screen (this is because the screen calls for a stock to close above $7, and CEU is right around there) and it increased from 77% to 85% on the David Dreman screen. RGR is now a 1/4. It decreased from 90% to 80% on the Kenneth Fisher screen, but increased from 60% to 87% on the Motley Fool screen.

I was way early selling calls in CBI yesterday. Oh well. I've got to learn to leg into spreads better. The problem is I was so nervous about a reversal that I put on the sell leg too early, and what I need to recognize is that by virtue of buying options instead of common stock, I'm already diminishing my downside risk. Buy the dips and sell the rips. The same goes for FUQI.

EME is right where I want it. I'll probably pull the trigger on the buy leg of a call spread tomorrow.

GME, NEU, SPAR, and CEU are getting interesting, as well. I'm still mad about missing the plunge in CEU yesterday morning, but there's nothing I can do except hope I get a second chance. SPAR, GME, and NEU are two I'd like to see pull back just a little more before I take starters in them.

UTA is still drifting in a volatility squeeze between the 50-day and 200-day EMA. I plan to wait for it to resolve itself. If it resolves bullishly by breaking out above resistance, I'll get long. If it resolves bearishly and breaks down below support at the 200-day EMA, I'll probably take a small short for a trade, as it would likely fall back to $9, where I would cover. If it firms up, I'll reverse and go long, but if it doesn't, I'll remount the short.

RGR, ARO, and ROST are all still in show-me mode, meaning I need more convincing before I go long in any of them.

Position: Long CBI, CRE, FUQI

Disclaimer: This is not a recommendation and is presented for informational purposes only.