Most notable feature of the day is the second inside day in NASDAQ (QQQ). With its completely neutral slope on the 50 DMA the warning phase has not accelerated, but at the same time is no longer considered "weak". So, is it any wonder the ranges over the last 2 days have stayed inside and narrow? Based on past patterns, the indicators point to more downside unless the QQQ can get over 64.75 with volume.
S&P 500 (SPY) When I write I prefer to sell rallies, I am hoping for a more substantial one than it had Thursday. But, now that the oversold RSIs are alleviated, if this comes in lower, maybe this was the rally and time to just get short until 132.00 Subs: Note that all indexes have positive pivots, so to keep flexible, unless S1 breaks, not dismissing opening range reversal buys.
Russell 2000 (IWM) Under today's low, I would expect more selling with next support 75.50
Dow (DIA) Unless this clears 130.50 area, also continues to look weak
GLD A move up to 158 would be a good short opportunity
XLF (Financials) Spent all day above 15.00 then fell at the close trading even lower in the aftermarket. 14.38 back on the table
IBB (Biotechnology) After the inside day, followed through to the upside. Now has to clear125.20 or could roll over again
SMH (Semiconductors) I expected more. 32.15 support to hold or more downside
XRT (Retail) Tried the 50 DMA and closed beneath. Must continue to move higher or vulnerable under today's low
IYT (Transportation) 91.00 next support
IYR (Real Estate) Tried 64.20 again, but weakened by end of day. Still want to see what happens at 63.00.
USO (US Oil Fund) Must clear 37.05
TBT (Ultrashort Lehman 20+ Year Treasuries) Failed at the fast moving average. 17.70 recent low
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: Long F10.40 area max risk
Post earnings: DDS Could see a breakaway gap. TSLA DOJI hammer must clear the 50 DMA
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 87.00 max risk. 4 days under pivots at 88.12
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 Inside day and positive pivots-but leaving as category 2 since closed weak. Must hold 58.93 and clear 59.83
CERN Like to see 80.24 clear and hold today's low
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:
HOG 49.46 max risk
PNC Use tight risk to S1
EQIX Like to see 157.50 hold
AMZN 218.50 this week's low. Could not close above the 10 DMA. Strong but anything can happen
BBBY Inside day-watch range break
ACOM Must hold 25.96
MJN Must hold 82.25
JAZZ Inside day. Must clear 50 and hold 48.00
SLG Really has to clear 81.90 now and hold 80.00
GOOG (Not a condition) Inside and narrow range day and could be pushing against the 50 DMA to break out
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:
LVS (Not a condition) Under 50.64 will revisit at the 200 DMA. Must clear 52.40 now
Slingshot Possible and Oversold: CAT (has to clear the 200 DMA)
Other: Back above the 200 DMA or 160 EMA with positive pivots COST CELG CVX ILMN JCP
Shorts:Check the ultrashorts
BBG Must break 23.60
CHRW Must break 60.05
SLB Must break 68.71
QEP Cannot clear 30.20 (Short)
BHI Must break 41.32
SNDK Must break today's low
Goodnight!