Trade Ideas for February 19, 2010

This morning you definitely have a different tone than you have had over the course of the past couple of weeks, with the Fed announcing a that they are raising the overnight lending rate for banks a quarter percent. While the markets are noticeably down this morning, I not going to put it past the bulls to find some asinine reason for recovering off the early morning lows and managing to rally the markets by the end of the day. Now, I don’t expect this to happen and think the odds of it occurring is highly unlikely (maybe a 5% chance), but I’m not going to put anything past the complacency this market has exhibited of late to do something that knocks me right off my rocker. 

The big report that all eyes will be focused on this morning will be the Consumer Price Index report expected out at 8:30am ET. Should this number disappoint, we could see a nice little meltdown today. 

Currently, futures are showing the Dow down 54 points, followed by 9 points on the Nasdaq and 8 points on the S&P.

Here are Today’s Trading Ideas…

Potential Swing Trade (Long): Valero (VLO) – Not the best trade setup in the world, as it is getting rather difficult to find a stock that isn’t completely overbought given the market rally of the past two weeks. Nonetheless, VLO has a cup & handle pattern emerging, that should it manage to complete the pattern, could be indiciative of a huge breakout. Currently it is now trying to put a bottom in on the “handle” portion of the pattern. Stop-loss here would be 17.15.

Click here to See the Rest of My Trading Ideas.

Potential Swing Trade (Short): JPMorgan Chase (JPM) – This stock has been on my “short-list” for quite some time now, and is setting up very nicely after putting in consecutive higher-lows and lower-lows, this stock is a classic text-book short setup. Place your stop at 42.30

Potential Swing Trade (Short): Lindsay Corp (LNN) – A plain as day head & shoulders pattern, that after breaking down has since rallied back up to the neckline to offer a very nice short entry on this stock. Stop-loss here is 42.44.

Potential Swing Trade (Short): Goldman Sachs (GS) – This stock has been diverging from everything the market has done since early October. When the market has marched higher, GS just keeps going lower and lower. Over the past few days, it has managed to rally back up to the major resistance level (indicative of where the first major breakdown occurred in the stock). Place your stop-loss at 167.71.