Evening Watch List for May 10th

Mish Schneider | May 10, 2012

Let's Get Right To It:

S&P 500 (SPY) Now 6 days under the floor trader pivots and officially oversold on the daily indicators. Slope on the 50 DMA now negative which means warning phase gathering momentum. Would prefer to sell rallies

Russell 2000 (IWM) Inside day on the 160 EMA meaning, in the current warning phase, should see some buying come in over today's high, but if breaks today's low, another leg down likely.

Dow (DIA) Most oversold of the indexes. Expect last swing low 126.92 to hold with any rally close to 130 a likely short opportunity

NASDAQ 100 (QQQ) Inside day. Big eyes here on the way today's range breaks since a run above today's high could change the near-term outlook which for now, still looks bleak.

GLD Oversold which means have to wait for some rally before putting on a new short position

XLF (Financials) Valiantly tried to climb above 15.00 instead closing under the swing low from early April. 14.38 is next area of support.

IBB (Biotechnology) Inside day with next underlying support at 121.65.

SMH (Semiconductors) Remains oversold with support at 32.15. Outperformed the market but could not get above the 160 EMA

XRT (Retail) Nice attempt to firm but not enough to get above the now neutral sloped 50 DMA which means like everything, vulnerable still

IYT (Transportation) Looks double toppish with 91.00 a possible neckline

IYR (Real Estate) Got to 64.18 after I wrote over 64.20 this gets exciting. Right now, market's best hope to hold up

USO (US Oil Fund) Oversold so unless it looks like it could return back above the 200 DMA, would leave this along

OIH (Oil Services) Inside day and still oversold with possible slingshot and room for a good short covering rally

XLE (Energy) Inside day and looking similar to OIH

TBT (Ultrashort Lehman 20+ Year Treasuries) Watch 18.05 again

Longs: On categories: Gap higher days we go to all categories and choose ones with lowest risk that break the opening range. On weaker days, we look at Category 3, especially if the picks hold S1, previous day lows or a major moving average and have a good risk on the reversal. The difference between Category 1 and 2 is the stock condition-a Condition 1 is strongest stock and more likely to make a parabolic move. Note: Lots of Category 3 which is perhaps the best sign for the market

Post earnings: TSLA A gap above 32.75 could be interesting

Category 1: (Aloha) Positive Phase, Condition 1, 2 days under the FTPs, Risk to Previous Day low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:

WFM 86.60 max risk. 3 days under pivots at 88.25

Category 2: (Pipeline) Positive Phase, Condition 2-3, 2 days under the FTPs, Risk to Previous day low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:

AXP Like to see 60.00 R1 clear and 58.95 hold

Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means candidate for Opening Range Reversal, Risk S1 or previous day low, whichever is lower unless noted differently, Target- Day to at least 3 ATRs from entry:

SWI Must hold today's low and clear today's high

CREE Has a lot of resistance at 33.45 which if clears is good sign.

CTXS Featured in today's video. Like to see 81.25 hold

QIHU Narrow range inside day back to condition 2. Must hold today's low

TDC Back to condition1 provided 72.00 holds

EQIX Like to see 156.50 hold

AMZN To keep risk light 222 should hold and 225.80 needs to clear

KSS Eventually needs to clear 52.00 for longer term hold

VVUS Inside and narrow range day. Must hold today's low

Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 1-4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:

MJN Narrowest range in 19 days. Max risk 82.15

LVS (Not a condition) Oversold DOJI day. Risk to today's low and today's high corresponds with R1

JAZZ Like to see 48.00 hold and 50.65 clear

Other: Negative pivots for only 1 day and good condition: SLG Should hold 81.00 and clear the 10 DMA to return to a condition 1
F Like to see 10.55 hold up Positive Pivots

NOV FIO Really, really oversold and DOJI

Slingshot Possible and Oversold: CAT (has to clear the 200 DMA) CIE

Shorts:

CHRW Cannot clear 61.09

SLB Cannot clear 70.56

QEP Cannot clear 30.49

ANF Cannot clear 47.58 Slightly Positive pivots

BHI Cannot clear 41.92

DECK Cannot clear 52.31