Morning Setup 10/1

Futures are pointing down, which isn’t surprising considering that many will be looking to capture gains, or take the reduced losses throughout today. We could see some price swings depending on what we hear from the Do-Worse Congress. Senate will be picking up the bailout plan to vote on, that the House rejected just a few days prior. I personally hate markets that look to congress for their fix. It increases the unknown and makes the market even more unpredictable. It will be nice to get back to the old way of doing things once congress gets done ripping off the taxpayer meddling in our markets.

Of course the only reason you’re probably reading this, is not so much for my rants against congress, but rather for the setup for this morning. They are slim-pickings today. A lot of stocks have already seen extended breakdowns on the charts. But there is still a few that remains that we are watching closely. Below is STSI, which specializes in smokeless tobacco products. Any case, from a basic standpoint you have a very attractive double top forming, and along with a very nice breakdown from Monday’s sell-off. This stock has managed to double, almost triple in a little more than a month.

Ideal entry for this stock though is difficult to come by. While, I wouldn’t let this stock trade beyond the previous highs, which is somewhere around $4.06, I would have to wait and see how this stock trades today and then find a resistance area on the intraday charts to name my entry. I’d also be careful about trading in this security within the first 30 minutes of trading – you can really get faked into taking a position you’d rather not have. Nonetheless, click on the chart below, and if you’re interested in seeing how we really trade, then Subscribe to our Member’s Area where you’ll get a whole slew of picks.

Here’s the STSI chart…

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