WOW – Japan Takes Center Stage

The devastation in Japan is on a scale I don’t think any of us can truly grasp.  It’s hard to think about how we can profit from this disaster, but there are opportunities to consider. In the meantime, consider giving to the JETRF by clicking on the GlobalGiving link to the right.

At this hour (10pm central on Sunday), the asian markets have fallen off significantly with the TOPIX and NIKKEI leading the way (obviously).

There are numerous ways to interprate the fall-out from the Japanese disaster.

Here are a few thoughts to consider headed into Monday:

• rice crops will likely be devistated in Japan.. who will benefit?
• Japan will have to rebuild. Who benefits?  FLR and CAT.  Maybe copper, cement, steel companies
• US companies relying on chips (especially flash drives) may take a hit.. My guess is that the tech stock might be weaker than other sectors
• Might want to avoid insurance companies
• Consider the fear that will arise from fears of nuclear energy – avoiding nuclear power and considering coal, and natural gas.
• Oil demand will likely fall with Japan unable to consume at normal levels for a while
• We’ll possibly see a metals gap up –  silver and gold.
• Keep an eye on the nuclear reactors in Japan.  They need to get their power grid up for anything positive to happen.
• Watch copper this week. Could be some buy opportunities.

Market snapshot:

We are at a scary point in the markets. There has been plenty of distribution and little in the way of conviction buying.  Swinging is still difficult and I’m keeping swings at less than 10% of my portfolio until SPX pushes sma10 above sma20.

Swing Watch List Update:

For tomorrow, I’ve add a few stocks to the swing watch list. I don’t want to overd0 the list until we see some directional movements in the market. 

HCN – NEW. Ascending triangle at horizontal resistance.
WPI – NEW. Ascending triangle at horizontal resistance. Need to wait on breakout.
EP – NEW. Nice bounce off horizontal support. Would like to see it get through 23.6% fib retracement on longer term view.

F – NEW. Massive falling wedge.  Waiting for possible move out of wedge on engulfing Friday candle and some horizontal support.
ACE – NEW. Big shadow on Friday candle may signal reversal.
DE – NEW. Nice volume Friday and bounce off SMA100, horizontal resistance, and trendline support.

CAT – NEW. This is a Japanese rebuild play.  Currently holding support and recovering back above SM50. Not interested below.