MLR - Premarket Pulse October 14, 2013
Major averages were up Friday on lower volume. The markets continue to be subject to headline risk as no deal in the ongoing budget log jam has been made as of yet. Fear and thus heightened levels of volatility may shoot even higher as the debt ceiling deadline approaches. Pre-market, futures are trading down over half a percent as the budget stalemate continues.The Market Direction Model remains in cash for now.
Solarcity (SCTY) was a buyable gap up we reported to members prior to the open on Friday. The stock continued to rocket higher after its open. It is now well extended from its buy point, but should it pull back in a constructive manner in the ensuing days ahead, it may offer a second chance. Of course, in strong markets with leading stocks, another entry point does not come until the stock has made good gains and offers a second entry point often in the form of a pocket pivot. Alternatively, SCTY's move on Friday was also a breakout through the 45.60 peak of the middle of the "W" in a double-bottom base formation. The stock is just barely within range of that buy point despite trading up pre-open.
We noticed the gap up in Spirit Airlines (SAVE) at Friday's open but it had a number of defects which did not make it a true leader including the gap down on huge volume on 7/30/13 and slowing sales. 2013 has been one of the most challenging years for trend following and stock picking so we aim to focus only on those stocks we feel represent the best of the best.
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