I have been consistently friendly to the market since the year began. I write everyday about how the phases are positive, the volume is light with the occasional accumulation days thrown in, major sectors have been leading and other former laggers have done surprisingly well. I give you a head's up when near-term Relative Strength Indicators get overbought and share with you a sigh of relief when digestion works those overbought conditions off. We have seen everything we have been writing about come to fruition, especially in NASDAQ.
So then-was this the blow off rally or are we just now starting to go parabolic? Blow off rallies happen on new highs with big surges in volume. In NASDAQ (QQQ) this was the biggest volume we have had since December 21st. Not quite double the daily average, but indeed double the volume over the last several trading days.
S &P 500 (SPY) There is a gap from July 27th up to 133.06 that has not been filled. Today's high 132.87 came close. Relative to the aforementioned concerns and a blow off would feel a lot better if we fill that gap and hold. Subs- A move under 130.60 scary.
Russells 2000 (IWM) Still lagging behind although it took out last week's high. Let's put it this way, under 77.25 a major head's up. Otherwise, has 81.00 as resistance. And now overbought
NASDQ (QQQ) Top of a 10-year channel and new highs. First one to watch to see if can get to 64.00 and/or if breaks 59.83 old high and starts to topple.
ETFs:
GLD Well, well-nothing like a recirculation of old news from the FED (rates remain the same until 2014) for a startling turnaround day on huge volume. So much for the gap and me looking to short.
XRT (Retail) Make that 5 ATRs (5 times the average true range) and counting since the price broke out above the channel.
XLF (Financials) This sector better bust loose soon or will definitely spoil the fun. Subs-14.28 is the number to clear and 13.95 the warning if breaks.
IBB (Biotechnology) Subs- Opened at 113.49 and never looked back.
IYT (Transportation) Has room to 97.00
XLE (Energy) 73.17 October 28th high. Might see that on the open and if so, 76.00 next target.
TBT (Ultrashort 20+ Year Treasury Bonds) It was done but then had this surprising rally the end of the day. Certainly keeps the possible bottoming formation in place. Subs-The 50 DMA at 18.92 held. Pivots negative at 19.34. Will keep watching this for re entry, especially if today was indeed some kind of blow off run in the indexes.
UUP (US Dollar Bull) Subs-Took a tight risk trade pre-FED that got us stopped out 15 cents under entry price. Now, bearish engulfing pattern will keep me sidelined.
Longs: Issue now is that so many stocks are close to overbought and although they could run more, the risk on new entries becomes impalpable.
NFLX Had a huge move after earnings which will give this a gap higher over the 200 weekly moving average. Would look for an Opening Range Reversal if sets up.
RAX (Narrow Range 12) Not overbought with positive pivots at 42.89. Good risk to under today's low 42.55. If this can get going and clear 45.00, potential is excellent. Day to Swing
VHC 2 inside days in a row at an interesting price point on the 50 and 200 DMAs. Has positive pivots at 24.32 with max risk 22.95. Even though pivots lined up, still want to see this clear today's high and R1 24.89. Then can see its way to 29.45 or higher. Day to Swing
NTAP With positive pivots a long position, still want to see this clear 38.00 to close in a gap left at 40.58. Pivots positive at 37.59. Risk now today's low 37.11 plus fudge. Day to Short-term Swing
CREE (Narrow Range 14) Neutral pivots 26.40 and needs to clear R1 26.77 with risk 25.98 after an inside day. Then, looking at 30.00 with major overhead at 33.00. Day to Short-term Swing
Honorable Mention: Must clear R1 Pivots YOKU (Narrow Range 11 R1 20.98 risk under 20.00)APH (55.09) OR Reversal Candidates: COL* MOS ESRX FDX LULU* RHT*
Shorts:
GS negative pivots at 107.72 with max risk 109.48 R1. Has room to correct to the 50 DMA at 96.00 a reasonable target. Day to Mini
DDS Negative Pivots at 45.66 and risk 46.22. Could see much lower especially with a weekly close under45.00. Day to Swing
Honorable Mention: APKT (Has to break S1 29.81)
Goodnight!