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Put Your Stock Market Shopping List Together Right Now

By Jeff Clark
Tuesday, July 10, 2012

Stocks have gone nowhere over the past year.  
The S&P 500 closed yesterday just about where it was on July 10, 2011. So buy-and-hold investors have little to show for their efforts.
Traders, on the other hand, have had plenty of chances to profit. You just had to pick the right time to buy and have your shopping list ready ahead of time...
Last year, for example, we pointed out several buying opportunities here, here, and here. Each of those buy points came on the heels of sharp market selloffs and resulted in immediate 7%-20% gains. But you had to act fast. And you had to be ready BEFORE the market sold off.
Now, I'm telling you again – get ready.
Stocks are poised for another quick selloff. And if history repeats, any sharp decline in July could lead to a late-summer rally. Take a look at this chart of the S&P 500...
The blue circles show the similarity between the action over the past month and that of July 2011. The red line marks the key support level at 1,275.
At the very least, stocks should come back down and retest the early June low at about 1,275. Right now, it looks like that level will hold, and traders should get ready to buy at 1,275. But it all depends on how a handful of technical indicators look when we get to that point.
For example, the McClellan Oscillator – which was overbought last Thursday and hinted at a strong decline – has fallen into neutral territory. Another 50-point drop or so in the S&P 500 should be more than enough to push the Oscillator into "oversold" territory and signal the potential for a rebound. Other indicators show the same thing. But we won't know for sure until we reach that point.
The only thing we do know for sure is last year, the biggest gains from "rebound rallies" happened in the first few days of the rally. Traders who didn't prepare ahead of time got left behind.
Even though the market appears poised for a sharp decline over the next week or two, now is the time to get ready for an imminent rally phase.
Don't buy anything yet – just get your list together. I'll let you know when I think the time is right to go shopping.
Best regards and good trading, 
Jeff Clark

Further Reading:

Last month, Jeff told readers to buy into a down market. Traders who followed his advice are already up 7%.
And just two weeks ago, he said oil stocks were setting up for a quick bounce. "They're brutally oversold," Jeff wrote. "And they're trading at dirt-cheap valuations we haven't seen in years." Since then, oil is up 6%. Read more about this trade here: A New Buy Signal for Oil Stocks.

In The Daily Crux
Market Notes
Euro plunge continues... currency sinks to its lowest level since 2010.
Agricultural commodities are among the best performers of the past three months... prices for soybeans, corn, and wheat are all up 12%-plus.
2012 is shaping up to be a "sideways" year for metals... gold is up 1%, copper is flat, silver is down 2%.
Junior gold miners are struggling... Jaguar Mining and Richmont Mines break down to multiyear lows.
Market Watch
Symbol Price
S&P 500 1352.46 -0.2% +0.6%
Oil (USO) 32.17 +1.8% -14.9%
Gold (GLD) 154.04 +0.2% +2.5%
Silver (SLV) 26.54 +0.9% -25.8%
U.S. Dollar 83.10 -0.2% +10.9%
Euro 1.23 +0.1% -13.8%
Volatility (^VIX) 17.98 +5.2% +12.7%
Gold Stocks (^HUI) 438.03 -1.1% -17.1%
10-Year Yield 1.51 -2.0% -50.0%

World ETFs
Symbol Price
USA (SPY) 135.32 -0.1% +2.8%
Singapore (EWS) 12.38 -0.9% -7.2%
S. Africa (EZA) 63.82 -0.6% -7.5%
Japan (EWJ) 9.29 -0.5% -10.3%
Taiwan (EWT) 12.21 +0.1% -16.1%
Lat.America (ILF) 41.45 -0.2% -16.5%
Canada (EWC) 25.89 -0.3% -17.1%
China (FXI) 33.05 -1.2% -19.7%
S. Korea (EWY) 53.37 -0.7% -20.3%
Israel (ISL) 11.94 -1.7% -26.9%
India (IFN) 20.23 +0.1% -30.7%
Russia (TRF) 13.63 -0.9% -37.9%

Sector ETFs
Symbol Price
Retail (PMR) 24.74 -0.8% +13.1%
Utilities (XLU) 36.71 -0.3% +12.1%
Consumer Svcs (IYC) 81.24 -0.4% +9.7%
Big Tech (QQQQ) 64.00 -0.2% +9.5%
Health Care (IYH) 79.46 +0.7% +8.5%
Real Estate (IYR) 64.90 +0.2% +7.6%
Construction (PKB) 13.98 -0.9% +3.7%
Biotech (PBE) 23.69 +0.0% +3.5%
Oil Service (OIH) 36.01 +0.1% +0.0%
Big Pharma (PPH) 38.91 +0.5% +0.0%
Financials (IYF) 54.82 -0.3% -2.1%
Insurance (PIC) 15.90 -0.1% -2.1%
Media (PBS) 14.68 -0.8% -4.2%
Industrials (IYJ) 67.26 -0.2% -4.2%
Software (PSJ) 26.07 -0.7% -5.5%
Transportation (IYT) 92.79 -0.4% -6.1%
Defense (PPA) 18.85 +0.1% -6.9%
Telecom (IYZ) 22.74 +0.2% -7.3%
Water (PHO) 18.27 -0.3% -8.1%
Semis (PSI) 14.21 -1.4% -16.1%
Basic Mat (IYM) 64.01 -1.1% -19.0%
Nanotech (PXN) 6.84 +0.6% -20.8%
Alt. Energy (PBW) 4.32 -0.7% -49.4%

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