Comparing Last Year to Now

Many traders and technical analysts have taken note of the similarities in market action over the summer months of the last 3 years.  All of this has occurred since the Federal Reserve started their QE program to help prop up the markets.

Last Thursday I posted a chart (shown below) to chart.ly that showed the similar patterns from 2011 to now.  We are right now at a crucial juncture where the market has to decide whether the troubles in the Euro zone can be contained and managed, or whether weakness there will ultimately lead to a worldwide global recession.

Click chart to enlarge:

Here is a close up view from July of 2011 showing the head and shoulders top that lead to the 17.6% drop in late July and into August.  Note how the 200 DMA was in a strong uptrend (as it is now) just as the market was about to fall off a cliff.

Here is my assessment of the current situation showing key areas of support.  The similarities to 2011 are remarkable.

Setups Under $15 for July 2, 2012

Here are the results of a scan completed on finviz.com over the weekend.

The criteria was:

A) stocks under $15 

B) average trading volume over 200K per day

C) percentage of floating shares shorted at 10% or higher. 

These are only for short term trading where I'm looking for 6-8% moves; more in some cases.  In this weekend's scan, I broadened the search up to $15 because many of the lower priced setups posted in this blog from last week already made big moves.

Some holdovers from that previous list that are still valid setups are: COCO, DNDN, GTIV, GTXI, THLD, and TWER  Make sure to check these charts and keep them on your radar.

Here are a few more on my watchlist: EXAS, HGG, MM, PRKR, RBCN, SGI, STEC, TC, TRGT.

ALWAYS use protective stops to protect your portfolio from potential big losses.

Click on charts to enlarge view: