Technical Picture - Inside Day

Another inside day amid choppy trade. The Nasdaq is still under-performing. Today's weakness was due mainly to TXN FNSR earnings which pummeled semi-holders and optical fiber stocks. As depicted on the chart below, the SMH broke its trendline with a spike in volume.

Now is a good time to be thinking about hedging the portfolio with something like the QID (inverse ETF) which is basing nicely with Two inside bars.

Futures are weak with the NQ e-minis trading 10 pts. below today's cash market lows.

As discussed last night, I wanted to trade the optical space on the heels of FNSR's disastrous guidance. JDSU had the cleanest chart. As we can see from the daily chart above, $22.00 was the gap open on 02/04/2011 and $21.00 was the gap day low, give or take a few pennies. So I was looking for a narrow setup at $22.00 with a 1 point target.

It set up almost perfectly, but stalled at the ORL, so I had take a partial.

URBN was a gap down continuation play from yesterday.

IBM was a missed trade, but I did manage to trade a couple of scalps within the upper range.

My stock focus list includes three biotech bull flags ALXN basing at $100.00 and printed NR7 today; ITMN NRIB; BIIB regular bull flag. I also like TBL and EL for longs. APOL looks very weak - also NR7 today; AKAM 2 inside, could go lower.