If there were ever a time to preach the importance of a trading plan, it's now. Unless you have been committed to the short side, as a potential buyer looking for signs of a bottom, no day last week remotely suggested that one was in place. That means the meager intraday rallies that did not yield volume nor penetrate key resistance areas should have kept you aside. Can a bottom happen now? Of course. Let's drill down.
S&P 500 (SPY) 129.35 the weekly moving average. I wrote that last Friday never thinking we would get close.
Russell 2000 (IWM) Would have to take a move over the 200 DMA with volume and why don't we add, a close there to get buyers interested
Dow (DIA) 122.00 area next support if slaughter continues.
NASDAQ 100 (QQQ) Never seen such low daily RSIs. But back above 61.85 could see some relief
ETFs: Only mentioning if see anything worth mentioning
GLD Nice gap follow through if gap holds
XLF (Financials) Touched down on the 200 DMA at 13.72
XRT (Retail) Narrow range day and held Thursday's lows on Friday against the 160 EMA-worth mentioning
XLE (Energy) At 62.50, I would have to be a buyer
TBT (Ultrashort Lehman 20+ Year Treasuries) Inside day and held Thursday's low on Friday. TLT closed unchanged-could be running out of steam. 125.03 October high.
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: Major focus will continue on indexes and the few ETFs mentioned
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:
VRTX May 15 a slingshot at the top but held Friday, closing just shy of the 10 DMA. Must clear R1 62.12 and close above there to stick
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:
CRM (Not a condition stock) Like to see lows of Friday hold. 152 resistance
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:
GNC Held the 50 DMA. Must cross R1 37.22, hold 36.10.
SWI Would only be interested if clears 46.23
EW Held up well. First has to clear the FTP 82.32 then the 10 DMA 84.00 and hold Friday low
LGF (Not a condition) 12.00 max risk and must clear and close above 12.50 to stay with it
Other: Daytrades or more since fell to 80 monthly, 200 weekly or daily moving averages, risk Friday's low, well oversold: EWZ Possible slingshot especially if opens above Friday high JOY (Positive Pivots) F CLR AGCO BRCM PNC if holds 61.45 clears Friday high could see 64.00
Shorts: Check out the new categories
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing trade
SINA Cannot clear Friday high
TIF Cannot clear Friday high
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Bear Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day's lows
AGQ 42.36 the 10 DMA sloping down but with gap higher Friday, have to sell a break of S1
CNQ 30.22 the 10 DMA resistance-can sell reversal under R1 or weakness
GDX Closed below the downward sloping 10 DMA. Must break S1
Have a great Sunday!