Monday Evening

Monday Afternoon

SPY Daily Chart (11:35AM)

Better housing numbers couldn't do anything for the market.  News of made up numbers from China and bickering in Europe have the markets headed lower.  The Supremes dealt the President a blow with their immigration decision and failed to announce anything on Obamacare so there really is nothing to hold the market up.

SPY is back in the box and looks to be headed for a test of the 200 day and maybe even the bottom of the box.  If it gets down there it would be a lower "relative low" as it would take it below the lower Bollinger band. 

Monday Morning

Gator's Chart of the Day: MJN

The market has been jerking traders around and many have been crying .... so .... I've found an appropriate chart.  Mead Johnson Nutrition Company makes .... wait for it ..... baby food.  Spun off from Merck in 2009 they have the whole world as their market.  Exposure to many currencies may be an issue but as long as populations continue to increase their consumer base grows.

Recent buzz in Forbes and an upgrade from S&P may be the cause of the volume spike on Friday.  The price has moved up from 78 to 88 without a significant pullback so it is a bit extended as it closed at an all-time high.  The Bollinger bands are still expanding and the 20 day is about to cross up through the 50 day simple moving average so it probably has more upside but maybe it's real virtue is it may not fall much if the rest of the market does correct.  Input costs should be going down but I have not disected their balance sheet.

The Trade
I don't suggest piling in right here right now but if the stock opens higher and holds it may be right to take a small (25%) piece of the desired position.  I would be looking for a small pullback to test the break above recent resistance but that may just be some sideways movement as some take profits and others recognize an opportunity to get in.  I would hold the initial piece as long as the stock stays above 84ish and add on a bounce from any pullback.  Volume will be important and if it dries up I would lose my enthusiasm for the stock.