Today brought another fairly broad and seemingly inexplicable rally in the stock market.
The S&P 500 followed-through on yesterdays strong move through 1975 and had a clean breakout from the symmetrical triangle pattern it had been consolidating in ever since August’s “Crash Monday.”
What makes this two-day rally surprising is that it is occurring right before this week’s Fed announcement.
If you are following the teeth gnashing headlines, it is easy to get the impression that tomorrow’s Fed statement is as important as the one Martin Luther made in October of 1517 when he nailed his little pamphlet to a church door in Germany.
However, the market has been behaving as if tomorrow’s Fed statement has already been priced in or is simply not that relevant.
Yes, the market can be crazy and irrational, but in this instance I personally think the market is being wiser than pundits or journalists and trying to tell us that the hoopla over what the Fed will say is basically “much ado about nothing.”
Here are a five trading ideas and chart setups that I will be watching tomorrow:
1. Allergan (AGN): The stock has seen an ugly and sloppy six-week pullback. However, price support in the 290-300 area and the rising 200 day moving average have held. Allergan (AGN) now seems ready to break out of its downtrend and push higher toward 315-320.
2. Cott Corporation (COT): A constructive and tight flag near 52 week highs suggests that COT is getting ready for a technical breakout to 12 and beyond.
3. EMCORE Corporation (EMKR): Another very constructive flag and a bullish bounce off the rising 50dma. It reclaimed the 20dma and closed above 7 today. All of these are bullish indications and point to increased odds of EMKR continuing higher toward 7.50.
continue reading for chart insights into Michael Kors (KORS) and ICON PLC (ICLR)…