Reading Assignments:

• Investing: Smart Global Infrastructure Plays
• Companies Most Likely to Declare Bankruptcy
• Caterpillar Profit, Forecast Beat Analysts’ Estimates
• Producer Prices in U.S. Declined 0.6% in September
• U.S. Stocks Retreat as Housing Starts Data Overshadows Earnings

Market:

10:02 AM

Sold PLUG @ 1.04, -5 %. Overall gain on position since previously sold 1/2 position at 1.30 at +18%

Pre-Market:

Earnings continue to surprise to the upside (no surprise), but Caterpillar came out this AM with much higher forecasts for future growth and earnings than anyone had expected. Evidence of recovery continues. Hard for bears to make a case in this scenario.

Today’s market looks to open up, as futures are up on earnings and performance of overseas markets. My bull/bear market candlestick indicator is slightly bearish, .72 ratio of bulls to bears. However, my candle pattern index has turned from neutral to moderately bullish, although there are not as many patterns showing potential for breakout, indicating strength is not that great.The McClellan Oscillators show a pattern that I suspected would happen, a tetering along the zero crossover line. This is neither good nor bad, just an indicator that things may continue as they have in recent days. So I think that barring any nasty surprises, we may finish out the month on an optimistic note, avoiding any such pullback that cautionists have been touting. I’m still not buying the “overbought” or “market getting ahead of itself” theories as long as we continue to see evidence of economic recovery. One of the only things I can see derailing the market recovery is inflation, but that doesn’t appear near on the horizon —   today Producer Prices showed an unexpected decline.

This does not mean that I am aggressively adding to my trading portfolio. I have a number of positions that I would like to get some good profits on, and then I’ll take profit. I am continuing to build into long international positions in my retirement accounts. I will add day or swing trades only if I see opportunities along the way.

Today I have two prospects I may consider, IOC and XTXI, though I haven’t analyzed them yet.

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