Novos contratos de arrendamento com maior queda desde a pandemia

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If you're a bull, times like this will test your patience. It's too early to buy, and you certainly should have lightened up by now, unless you have a long-term time horizon and are sitting through this little wiggle.
If you're bullish but undisciplined, here's what will happen. You'll remain confident in the knowledge that this pullback will be very mild. You can just ride through it, knowing that the dip-buyers will materialize soon. They'll halt the downtrend, so you'll just be patient and wait this one out.

But the market may pull back just a bit deeper than you thought. You'll get uncomfortable and begin thinking of all the profit you're giving back. The market could pull back even further. Finally, you'll sell -- right before the market finally does bottom out and the uptrend resumes. The takeaway: Bulls use stops.

If you're a bear, you must be feeling vindicated, right? After all, the big silly run-up is done. The averages are finally rolling over, and the "wall of worry" isn't crumbling. So you put on those shorts and watch them work, but be careful. At some point, the bulls will figure it out. They'll learn that whether or not the improving economy is sustainable over the long term, it is improving now! That's all that ultimately matters when you're coming out of a multiyear trough, especially going into a presidential election year. The takeaway: Bears use stops.

Allied Capital is trading at extremely low volatility now, but it looks like it's about to break out. The relative strength index, or RSI, is trending higher. The stock is under accumulation, as shown by the accumulation-distribution line, but money flow is trending toward the midline. That's to be expected in times of low volatility when the stock is trading in tight intraday ranges. Consider a stop just below the middle Bollinger Band just in case any breakout ends up being a fake-out.

Allstate had a great October, and November might be just as good. The stock gapped higher in mid-October and kept going. However, the $40 level has been a period of consolidation, but it hasn't brought about any type of reversal. Now, the stock is seeking a higher level. The trading volume is a bit suspect, and I'd like to see that pick up a bit more. Ideally, you might wait for it to fall back and test $40 before taking a new position, but if you're already long this stock, it's OK to stay put. It looks like it has more upside in it.


Bristol-Myers Squibb has been a bit sick lately, falling more than 10% since June, but it looks like the stock might be finished going down. Money flow, which gauges selling and buying pressure, reached an extreme negative in late September. Since then, it has been fairly positive, as the stock has bottomed out. Accumulation has been trending higher, and RSI is trending along the midline. All in all, Bristol-Myers may be a low-risk long. You'll know quickly if that's wrong because the support level is so close to the current price.

Burlington Resources is another stock that's resting right on support, this one at $47.50. I like the series of higher highs that RSI is making as well as the bullish trend in money flow. I still see a bit of distribution in the accumulation-distribution line, but that seems to confirm the recent decline from the $50 level. I'm more interested in where this stock is going than in where it's been. Consider a stop just below $47.50 as a function of discipline.

I featured Countrywide Financial as a potential short Monday, and the stock is performing nicely. However, I'm showing it again to illustrate what can happen when a stock comes back to fill a gap.

Now that the gap is filled, the downtrend stops -- at least temporarily. The burning question becomes whether the stock continues to fall or whether the uptrend resumes. If you look closely at the blue box I've drawn, you'll notice that the price action within it is actually the "flag" portion of a completed pattern. The stock gapped higher in early October (from around $88), formed the flag at around $98, and then ran higher to about $108 before it reversed. That's textbook chart stuff, with the flag flying at half-mast. We could have measured from the gap to the top of the flag and then projected a minimum upside target. In this case, the minimum was the maximum.

Now that the pattern is busted, we rely on discipline. I'd look for a bit of support in the blue zone now. But if Countrywide drops out the bottom, I think it's a free-fall to $80.

Be careful out there.


Dan Fitzpatrick