Top of the Range or More to Room to Run?

Stocks have been in a very clear range of 1120 to 1220 on the S&P since early August. In fact, this is the fifth run to get above 1220.

Yes, the past 4 attempts have failed. And as of now, this one may be stalling out at the same exact spot. Perhaps it is just going to have a consolidation period before getting above. Or perhaps the party is over and we start heading back lower in the range.

Given the reasonable odds that 1220 will be the near term top, I took profits on 1/3rd of my long positions in my trading account. However, I am keeping the remaining longs as I think that stocks have a decent shot to make it all the way up to the 200 day moving average at 1277. And yes, we could make it there without changing the longer run probabilities that we are in the midst of a bear market.

So as of this moment I will be looking for a spot about 5-6% above Wednesday's close to take long profits and get net short once again.

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Best,

Steve Reitmeister
Executive VP, Zacks Investment Research

Today's Top Stories: Thursday- October 13, 2011

ZACKS RANK BUY STOCKS

• Aggressive Growth - Salix Pharmaceuticals (SLXP) Zacks Consensus Estimate rose 8 cents, to $2.07. Projections for 2012 are up 11 cents on average, to $2.31. This is expected growth rates of 668% and 11%, respectively. Read More...
   
• Growth & Income - Ameristar Casinos, Inc. (ASCA) offers investors a stable dividend that yields 2.3%. If earnings growth accelerates at the pace it's expected to, then a dividend hike could be on the horizon soon. Read More...
   
• Momentum - Dollar General Corp. (DG) recently hit a new all-time high on the heels of another strong quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is loaded with momentum. Read More...
   
• Value - Gold Fields Limited (GFI) is still expected to grow earnings by 155% in 2011 even as gold prices have pulled back from record highs. The stock is also cheap, with a forward P/E of just 11. Read More...
   

Learn how to profit from our exclusive Zacks Rank stock-ranking system with free resources. Read More...

• Top 5 Small Cap Mutual Funds Read More...
• Mutual Fund Homepage

• Bull Of The Day: Cell Therapeutics, Inc.
  Full Zacks research report: Read More...
  
  
• Bear Of The Day: Bank of New York-Mellon
  Full Zacks research report: Read More...
  
  
• Ahead of Wall Street
  Read More...
  


• Zacks Industry Outlook: Insurance Industry Stock Update - Oct. 2011
  Though financials of U.S. insurance companies are still not strong enough to soak up losses from catastrophic events, tight market conditions and a favorable rate environment on steady demand growth could significantly offset the damages. Read More...
  
  
• Analyst Blog Highlights
• Sinopec Closes Indonesian Deal
• Forest Oil Remains Evenly Poised
• Earnings Preview: Mattel
• Full Analyst Blog

• Growth & Income Stock Picks-Oct.12, 2011
• Beat the Pros at Their Own Game
• The Short Ratio

PeopleAndPicks.com:

VIP "SteveHarm" is taking advantage of the market with BUY calls in (AKRX), (SPRD) and especially (STMP). Read More...

• Stock advance on Europe hopes @ CNNMoney.com
• EXCLUSIVE: Congress Plans Hearings on Volcker Rule @ FOXBUSINESS.com
• Wednesday's biggest gaining and declining stocks @ MarketWatch.com

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