This is a chart of the S&P 500 monthly a friend of mine likes to use to point out the designation of the bull and bear markets using the RSI on this monthly chart so when it is below the center line we are in a bear. Right now the RSI shows an over bought situation but note how long it stayed that way between 1995 and 1998. February is not over but see the red showing on the monthly candle at this point - first time in a while. It  is also now quite far away from the 20-month EMA.

Here is the Russell 2000 and the pullback from Friday. We actually need to see it test the 800 area to see if it is a valid break out. If it holds then we may be off to the races. The small caps led the first two years of the rally then stalled out from May until this month so they may take the lead again after their 8 month rest.

The NYSE - did not draw the support but you see it is horizontal about 23 points lower.

Oil rallied all the way to the 50% retrace and the trend line so here is the test and to me it looks like the move back up was too steep and needs to pullback again. It may though do a little false break out to the 200-day at $62.47

Gold is right at a horizontal resistance. We did well with GSS this week and some other gold stocks did pretty well but as a sector it still does not look like ready for prime time to me.

Here is the XAU and the chart is very similar to the Gold Bugs HUI.  If this trend is broken with enthusiasm and many gold stocks start shaping up my opinion can be quickly changed. If gold stocks become a good buy again in the medium term then they would run for weeks not days. Last year near this time there were 5-10 each day on buy lists and you could hold them many days or weeks. Those are the kind of times when sector strength can carry the stocks. I thick that will happen again but I do not expect it yet.

The economic calendar for the week from briefing com

Here are some new additions for the watch list. There are again many new subscribers so note that a main objective of ours for the benefit of the users of the site is to make reliable consistent gains and much of it in the short term. This means trading more frequently and taking some smaller profits but it is quite a safe way to invest as you are buying right next to support. If the support then does not hold you exit the position. Last week we mentioned that if you bought every trade at the buy point in the last 4 months and sold all at the close of the day you bought you would be up over 100%. If you sold at the high the first day up over 200%. Most however sell some and keep some and a glance at the public charts at stock charts shows how a big % of those kept going for quite a while and the ones that did not you were stopped out of with a gain. Once you sell part of your position you need to decide how much room you will give the stock to move but do not let a winner turn into a looser as we have too many trades to get stuck in one going the wrong way. If you cannot watch the stocks then you can set stops after you buy and some brokers allow automatic trailing stops that can be placed at the time of the buy order.

In the last 4-5 months we could buy really all the break out stocks and do very well though the ones with high volume usually do much better. If the market does pullback here then the better play would be to trade the ones with the best volume or take smaller position sizes on the "usual" volume trades.  Yahoo shows the normal volume average on all stocks and Quotetracker automatically computes and gives you the volume run rate for each stock.

Only 17 days to go! so you can vote each day --

on the words "Vote for It!" and help us finish February on the top position so we do not have to then vote any longer.

Here is another comment: The Amex stocks have been winners as we mentioned above so later in the week I will feature a day of three letter stocks. Today however we have Nasdaq stocks. Instead of a scan to limit which stocks I would view I started with about "R" and looked at all the Nasdaq charts down to "V" and these I think worthy of the watch list.

RVSN  may consolidate a bit then a try at $21.75.

SIRF   This one is strange and maybe does not belong here. 1000 islands...yikes. Sure would not be comfortable holding this over night but if it breaks $32.20 will at least play it for the day.

OSTE  This one if it pulls back to the $5.80 area may be a good entry also. If it does not pullback then I would wait for the break out. On all of these buy as close to the break out as you can. Sometimes they break out and pullback in the first couple of minutes and if you see strong buying on the pullback it is a bullish sign.

SONO  The lower level the buy IMO - the top to point it out as could be some resistance.

SKYF   Volume has not been strong in here but it so far is a nice set up for a try over $29.00

UMBF  Above $38.00 could then enter a new range.

VCLM  A bit of a cup and handle perhaps or head/shoulders looking for a move over $34.00.

ABBC  I like the long basing period. Maybe I better check --wait...ok. When I made the chart I had not looked but right now it dawned on me that it may be a buy out and that is why the price is so flat. It can often happen that way and sure enough this bank in doing a merger. But the chart is here already and looks nice so let's leave it on the watch list a week at least as things may happen and we then would buy over $19.70 if it got strong volume.

SPSS  Nice gradual move with 50-day support and now as a break out over $32.10.

TWTR  Did not realize that Tweeter had dropped so much. There has been some renewed interest and we have had ones like ALTI and NTMD with similar charts do well so will play over $1.80 then the 50-day and note the resistance at $2. If it can break that it could make some good gains.

Here are two short set ups.

We had some a week or two ago and they all held support and these may also but I think it good to have at least a couple good candidates and if the market weakens these may follow along.

ULBI  A break down under $10 could take it to the $9 area at least.

VTAL  Under $31.70 with a target of the 200-day.

VLGEA This one I had the chart up before noticing the volume so use it as an example. When you buy stocks look at the spread. The difference between the bid and the ask. There are some stocks that for what ever reason have a habit of wide - sometimes 3-5% spread so are hard to buy and sell. The other thing to be aware of is the normal volume of a stock. I really liked this chart and the high volume (relative) run up days. Then I noted the 714 was not 714k shares traded on Friday but 714 shares. You could be stuck in this type with no buyers. So an example.

VSAT  Is one like we mentioned how on Friday broke out but gave up most of the gains. This is often a reversal signal but we will watch as it may try again and if the market does reveres back up this week it may help. CALP from our list may also try again.

OK - to make up for the bank stock chart and having all Nasdaq stocks - I found an Amex stock for the list. MEM is one we had before. It really needs and increase in volume to get going. I think you an take a position on good volume at $5.30 and it would then need to get over the 200-day at $5.43.

Amex market may be going up but there are few setups there now. We had two recently.

QD looks pretty good though over $3.10

Here is another plain utility building. There are no raised bricks but only painted to look that way and the doors are plain wood. I think it is fun what they have done with all of these buildings.

That's it for today - will see during the week. Remember the morning Videos each morning.

Check the current Earnings Calendar on all overnight holds.

Check the current  message board also for other good stock candidates as there are several there right now.