Once again, biggest clue Wednesday, just like Tuesday, was that S&P 500 (SPY) could not clear previous day high. Nor could DIA, QQQ or IWM. So market may be oversold, but the scenarios I have laid out for watching for a potential bottom have not come to fruition-not yet.
S&P 500 (SPY) Touched down on the 160 EMA as it continues in oversold territory. Also filled a gap from 02/03/12.
Russell 2000 (IWM) Never gapped higher back in February. Been looking at 75.50 as next support. Oversold with no classic signs of bottoming at this time
Dow (DIA) Most promising or should I say most clarity since this had an inside day. Really oversold daily RSI Subs-Would not short weakness, but over today's high could be a sign of relief
NASDAQ 100 (QQQ) With RSIs extremely oversold, would not look to short, rather, wait to see when signs of bottoming action emerges.
GLD 148.27 last swing low 12/29/2011
XLF (Financials) Won't make a move in this until it is clear that it can close back above the 200 Weekly moving average or it cannot. 14.40 is a swing area
IBB (Biotechnology) Until it crosses 126.90, that area could wind up as triple tops. Wednesday turned out as an inside day
SMH (Semiconductors) Could not hold 32.15 so now we look at the 200 DMA at 31.50
XRT (Retail) Held 59.00 with an inside day-but unless it gets back over 60.08, no reason to cheer
IYT (Transportation) I continue to watch in amazement how well 91.00 is holding.
IYR (Real Estate) Became a short under 63.00 and now sliced through the 50 DMA. 61.70 next area of support
USO (US Oil Fund) oversold and clearly getting more oversold
TBT (Ultrashort Lehman 20+ Year Treasuries) Weekly RSIs very oversold-can rates go to zero?
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.
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:
N/A
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:
WFM Still holding gap post earnings. Max risk today's lows. Like to see the FTP at 86.90 clear first for ½ and if clears 10 DMA swing
GNC R1, the 10 DMA and today's high line up which means good one to watch for 5 minute opening range if trades above
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:
VVUS 23.50 must hold
BBBY 71.50 has to hold and has to clear 72.75
SWI Inside day. Closed right on the 10 DMA. Must hold today's low break today's high
LGF Bullish engulfing pattern after the slingshot on 5/07. Max risk 11.98 now and overhead 50 DMA 12.93.
MJN Over 10 day but with negative slope Condition 3. Max risk 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:
MCK Has to clear today's high and hold today's low
RRC (Not oversold) Inside day must hold today's low and take out today's high
EW Provided 82.81 holds, once clears the 10 DMA at 84.67 looks good.
Other: COST Positive Pivots holding the 200 and 160 moving averages. Narrow range day. Max risk today's low IBM Must hold 196.79
EQR Held the 50 DMA max risk now today's low. Has to clear FTP first then R1 and today's high.
Shorts: Stay tuned for 3 new categories for shorts-coming soon
ADTN Should not clear 30.29
APOL Has to break S1 31.86
CHRW Must break S1 60.32
CAVM Cannot clear today's high
DECK Should not clear today's high
CXO Must not clear today's high
Goodnight!