We came back from vacation to one of the toughest weeks I can remember. Warning phase, it was a stock pickers, hit and run market leaving both bears and bulls holding the bag way too often. I began the week looking at retail and real estate-both held up well. But the financial sector started to falter, and that was before the JP Morgan news hit the stream. Consumer confidence ended the week with somewhat of a high note. So here we are-bad news/good news-mixed market-exactly what warning phases are made of.
S&P 500 (SPY) Four failed attempts to get through 137 area and volume patterns that favor the bears. But, ended with a hammer candle and took a lot of bad news on the chin. Subs: Friday it held S1 but failed to get through the 70 EMA. Negative pivots. Under 134.50 could see a drop to 132.50
Russell 2000 (IWM) Under 78.00 and 75.50 looks obvious. Over 79.60 and 81.00 is next. Stuck in the middle
NASDAQ 100 (QQQ) After 2 inside days would have expected some follow through when it broke the highs. But, since that did not happen have to think lower unless 65.00 clears. Subs: Only one with positive pivots. Watch S1. Last Thursday video showed that we go here to buy strength and the IWM to sell weakness. Still going with that.
GLD Did not rally enough to get us short again. Until then, aside
XLF (Financials) 14.38 the retracement to the weekly moving average
IBB (Biotechnology) Cleared125.20 so fast on Friday, it was hard to chase. A close above 126.65 would look good which would be one reason to start thinking market is giving us ample time to buy in spite of the negative indicators.
SMH (Semiconductors) Looks better than the market provided 32.15 holds
XRT (Retail) A bear flag forming so unless it clears 61.00 lost some enthusiasm
IYT (Transportation) 91.00 important
IYR (Real Estate) Must clear 64.20 or see what happens at 63.00. But this and biotech are markets best hope right now
USO (US Oil Fund) DOJI hammer, oversold-200 DMA at 37.05
OIH (Oil Services) Daily very oversold-this is not where I would go for shorts right now
XLE (Energy) Railled into early April resistance and stopped with another doji hammer candle close-but not that exciting
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: Only Picks that outperformed the market, are a correcting condition 1 or 2 or are really oversold
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:
CREE 30.70 swing risk 31.95 miniswing risk and should clear pivots then R1
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:
EDU Must hold Friday low clear pivots then R1
TDC Must clear 10 DMA
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:
EQR Like to see 63.00 hold. Could go to new highs
AXP Neutral to slightly positive pivots and must clear the 10 DMA hold last week's low
MCK Should clear 10 DMA
WFM 87.50 good risk point
BUD Risk last week's low must clear 10 DMA
CERN Must hold last week's low clear the 10 DMA
AMZN Use S1 225.37 as support and risk
JAZZ Like reversals since stock thin, also has to clear 10 DMA
SPG Must hold last week'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:
CTXS (Not oversold) Has to hold Friday low clear 81.11
ACN (Oversold) holding 200 DMA
PNC (Not oversold) Has to hold last week's low clear the 10 DMA
Other: ACOM Must hold Friday low clear R1 SLG Must clear 81.39 TSLA Must hold 32.00 X Must hold 25.24 YOKU Through 24.30
Shorts: Some fresh picks:
SNDK Must break 35.18 not clear36.35
ADTN Must not clear Friday high and break 29.88
ANF Must not clear 47.45
APA Must not clear 88.58
OPEN (May be hard to short) Cannot clear 87.39
TPX Isnside day-must break Friday's lows
Happy Mother's Day!
