Seriously, I am not trying to sound like a desperate bull, but there are a couple of reasons why this may not be completely a done deal. First, SPY did not hit the 50 day moving average at 132.45 or the bottom of the channel that I showed in last week's video. Second, did not have a distribution day in volume. Third, it did not break the low from April 20 at 132.79, which was the day it gapped higher. Fourth, the slope of the 50 day moving average is still pointing up. What does this mean for tomorrow? It could mean that if we hold 132.79 and begin to turn around, especially if we can get through 133.60, the next hurdle will be the adaptive moving average at 134.61. But beyond that the little trendline that I showed you in today's video, might come into play. What would make me change my mind? If we gap open lower beneath the 50 day moving average. QQQ got hit harder., Did have a distribution day in volume, but also managed to hold not only the gap from that same April 20, but also the 50 day moving average at 57.25. However, the slope on that 50 day moving average turned down. This makes perfect sense when you look at the biggest stocks and how far they got hit today and it is hard to imagine any kind of rally without the market leaders in full participation. IWM closed beneath the 50 day moving average without a distribution day in volume with a neutral slope on that moving average. Now we will be watching the last swing low made April 14 at 81.45.
ETF's:
SMH hung on to the adaptive moving average and the low from last week. Clearly, that would be the first place to go if the market firms not only to the ETF, but anything in that group and sector that is holding up well.
XRT the same.
GLD had an inside day today and outperformed the market. That would be another place to go should the market firm as the slope of the 50 day moving average which is still quite a distance from current price, is pointing up. Now, that has four days under the floor trader pivot, so we should be looking first at 145.75 where the FTP comes in and since we had an inside day, above today's high 146.67 as the second place for it to get through. Therefore, I might be inclined to buy half a position over the FTP using the same two minute opening range that I did today and then add if it can get above yesterdays high.
FXE has a neutral slope on the 50 day moving average. Had an inside day, therefore I would not rule out the possibility of the dollar going in either direction from here. 140 is your support and 142 the resistance.
Looking at the ultra-shorts:
FAZ had an opening range reversal yet could not close above the last swing high made on April 18 at 43.64. Today's high was made in the early morning at 43.85 and it wasn't until we had an opening range reversal over 42.85 that this became clear to buy. Now, watch today's high 43.85 as the number to penetrate.
TWM is the ultrashort for the mid-caps. For the first time since March this went into an unconfirmed recovery phase closing just above the 50 day moving average at 43.08. Last time it was at this level was on May 5 when it made a high of 43.21. Today's high was 43.20. The obvious move is to buy above 43.21 in anticipation that if this market is to continue to correct, that will have more upside. Reasonable target would be up to a gap that was left back in March at 47.10.
Picks: Once again I will be particularly interested in the indexes and ETF's. The rest of the pics continue to be based on minimal amount of risk from both the long and the short side.
ACOM**still oversold and now five days under the floor trader pivot. I like the fact that it held S1 and 39.11 the low I showed you from May 5. Would look at this tomorrow for buying over the FTP using 39.11 as a risk and consider adding above the 10 day moving average which now comes in at 40.88. While the market is in a state of flux, I will keep my recommendation to day to mini.
RIMM**I'm keeping my wild pick up here tonight because it did not get beneath the swing low made last September at 42.53. As we know, it is way oversold. But with the floor trader pivot as our guide, now that it has four days under, there is no reason to buy this unless we clear the FTP which tomorrow comes in at 42.96, an excellent risk down to that swing low. Of course I'm just looking at this for a dead cat bounce possibly up to 46, possible up to 48 and wouldn't rule out the possibility of 50. Since that FTP is so close to unchanged, this is one that you should use a two minute opening range only if it comes in above unchanged. Day trade.
UNP has a similar looking formation to ACOM with a downward sloping 10 day moving average but a good-looking daily chart and four days under the floor trader pivot as a guide. 99.42 is a swing low for mini swing traders to use based on the low that was made April 14. For daytraders considering this had an inside day, I would use today's low 99.98. Swing traders can use beneath the 50 and 60 exponential moving average or just beneath 97.69 for a risk. Since this is one of the best looking charts right now, this would be another place to go provided we can get through the FTP. And the 10 day moving average at 102.18 is just above today's high so once again I would buy half over the FTP and add if we can clear the 10 day moving average. Day to mini.
RKT**I'm always a little bit hesitant to recommend stocks that have less than 1 million shares of average volume and an ATR of 2.24, but again, this is one of the better looking charts on the board. Has three days under the FTP which tomorrow comes in at 71.74. The clearest risk is the 10 day moving average at 70.53 for anything longer than a swing trader. Swing traders would have to use under the exponential moving average at 67.68. Buy over the FTP and if it can clear today's high 72.61, looking at all time high that was made last week at 75.40. Day to swing.
R this had an inside day today and made multiyear high on Friday at 55.67. Based on the weekly chart a weekly close above 55 provided the market doesn't collapse, could give this some momentum to the upside with the next overhead resistance at 60 and all-time high made in 2008 at 76.64. The closest support is the low from Friday 53.81 which was also a low after it gapped higher that day. Must clear today's high 55.30 and close there to stay looking good. Otherwise, if it comes in lower, the 10 day moving average is at 53.41 which would be a good spot to buy against on an opening range reversal. Day to swing.
LULU**this didn't exactly outperform the market today but has support not only near today's low 93.30 but also near last week's low 91.01. Has four days under the floor trader pivot which comes in tomorrow at 94.26. Again, could buy half a position over the FTP and add or at the very least feel comfortable sticking with this above the 10 day moving average at 95.64. Day to mini.
IBM another one with a lot of support down by today's low 168.31. Last week's low was 167.50 which is a good close risk. The FTP which it has now been under for two days, comes in at 169.24. Again, can buy half a position above the FTP and add or at the very least stay long if closes above the 10 day moving average at 170. Day to mini.
NVLS doesn't have a short term trading pattern, but I am including this because the 10 day moving average is crossing the 60 day exponential moving average and looks like it's just about to cross the 50 day moving average. The area of congestion comes in at 35.24. If this comes in lower, I would wait to see what happens around that area or if you can get close enough to use that area for a risk. Otherwise, it comes in and holds today's low 35.93, and gets through 36.50, especially with an opening range breakout, use today's low as a closer risk to see if this can get going to the upside. Friday's hi was at 38.40. Above that, we could see a move to 40. Day to mini.
Hon. mention goes to: POT as it not only held the 200 day moving average but closed up on the day. BTU which also held the 200 day moving average closing up on the day but with five days under the FTP which comes in tomorrow at 59.08. A move above could give it a rally up to 62.
Shorts: Ultrashort ETFs good to watch
XLE**never had an opening range failure nor a terribly convincing opening range breakdown. But it failed to get above previous day high and closed near the lows. Last week's low was 72.78 which is now a good point to sell against especially if this comes in under the FTP at 73.67. But, since it held up relatively well, another one I wouldn't discount buying for a bounce over the FTP to see what happens at Friday's hi 74.73. Similar to SLB, this could wind up with a short covering rally up to the 50 day moving average at 77.27. Therefore, exercise flexibility on this one. Day to mini.
SLB I'm listing this as a short but in reality, since it held previous day low, S1, and the exponential moving average I'm recommending you keep an open mind. Had an inside day today which means that if it breaks today's low 81.85 with an opening range confirmation would certainly not be hesitant to go short in anticipation that we will see minor support at 79.74 better support down at the 200 day moving average at 77.21. But, since it did have an inside day, the 10 day moving average corresponds well with today's high 83.66. If that breaks to the upside, then I would also be inclined to be a buyer in anticipation of it moving up to 86.55. Day to mini. Another one with a similar looking formation is CLF.
