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I came in today expecting the market to rally, not necessarily for anything more than a test of the key moving averages in the indexes. Therefore, I bought strength in XRT got stopped out than bought the opening range reversal. I bought DIA on the opening range reversal, and then I bought TWM as I saw the market weaken but did not stay with it since it was counter to my original plan. But, I am not upset with my trading because I did take my profits in POT and bought ATPG which was also profitable. Furthermore, although I got chopped up and wound up down on the day, my losses were extremely controlled. This happens to all traders. You take a stance, account for risk, but don't always get it correct. As I have written many times before, nobody makes money all the time but the professional traders when they lose, lose small and when they make, make big. That is the best that any trader can hope for. I've also said that I get much more ruffled when I don't do things that I say I'm going to do and then watch them turn into excellent trades. SLV which was a big part of my plan, would have made this day basically a breakeven. But, I missed the opening range reversal which also happens.
SPY did not have a good close. Wasn't so much the .1% down, more that we could not get above the 50 day moving average, closed beneath the 70 day exponential moving average, and had a bearish engulfing pattern although the volume was light therefore no Distribution day. It is starting to look oversold on the 2 day RSI indicator. Although I will always look for individual stocks that are moving on their own volition, at this point in time, I will most likely avoid buying any of the indexes until I see a good solid up day with an accumulation in volume. The scenario I had in my head was that today would be an up day on light volume, then buyers would come in tomorrow encouraged by the activity which would then give the market the very much needed boost of volume. Needless to say, that did not happen. Interesting, is that SDS didn't do very much either. Although it confirmed in a recovery phase, it did not take out yesterday's high nor could it get through the 70 day exponential moving average at 21.23.
QQQ also looking oversold, never came close to the 50 day moving average which ultimately put the nail in the coffin of the rally. Plus, after yesterday's low of 56.65, it closed lower today which is also a sign of weakness. QID did better as a result. Confirmed in a recovery phase, closed above the 70 day exponential moving average and yesterday's high.
IWM looks the weakest although it is also oversold. And unlike the other two indexes, it did have yet another Distribution day in volume. TWM closed above the 70 EMA and with a bullish engulfing pattern. Another one I would look to re-enter on an opening range reversal.
DIA closed beneath the 50 day moving average confirming the warning phase although that still has an upward sloping 50 day moving average making the phase weak. Now, must get back above 123.96 for any indication of a turnaround otherwise, if it breaks down under 123, would expect the next move down to 122.49.
Other ETF's: as I mentioned earlier, I bought XRT decided to liquidate at the end of the day even though it closed above the floor trader pivot. This would still be the one to go to should the market firm as it is still in a bullish phase. Same with IBB, IYR, and IYT.
FAZ closed firm, but not above the last swing high made on March 16 at 45.71 even though it rallied at one point to 45.95. XLF is now in a confirmed distribution phase, so the significance to think about with FAZ failing to close on the highs today will be if XLF can get back over the 200 day moving average of 15.55 with today's high 15.57. I wouldn't exactly get bullish in the financials at that point, but I would anticipate that the financials can rally and fill the overhead gaps.
SLV might have a little bit more to the upside, but at this point a good target remains 36.49 where the adaptive moving average is.
REE**holding the 200 day moving average but beneath the 160 day exponential moving average and the 10 day moving average at 11.72. That would be one to look at to buy against 11.00 the low from yesterday or on strength of the 10 day moving average for a possible rally up to 13.
Although XLE and OIH firmed today, neither closed above the adaptive moving average and since they both still have downward sloping 50 day moving averages, still look at these as potential shorts with today's movement a rally into resistance.
Picks:
FL**after the big move up on May 20, it now has two days under the floor trader pivot. The FTP comes in tomorrow at 24.92. Since it had an inside day, can either use today's how 24.73 as a very tight risk for a day trade, S1 at 24.66 for a mini swing trade, or 24.27 the low from the day it gapped. Swing traders would have to use a move beneath the 10 day moving averages 23.18. Day to swing.
CMG*gave up some of its gains from yesterday with an inside day. 278.14 is the 10 day moving average. Would either look to buy against the 10 day moving average to control the risk, or above the FTP at 281.50 using today's low 279.32 as a tight risk. If the market is weak, do not take a huge risk since a selloff can easily drag this down near the 50 day moving average or the 269 area. Otherwise, if we do get some firming action in the market, could see this moving up to 297 area. Day to mini
IBM although some damage was done with the gap lower yesterday, it had an inside day today and held yesterday's low. Would not be looking to go long if it breaks down beneath 167.07 and most likely wouldn't want to short this either as it is still in a good condition. But, now that it has three days under the FTP we can use yesterday's low as a risk if it comes in above the FTP at 168.03. Still has to clear today's high 168.69, and if the market firms, this will be one of the first ones to rally at least back up to the trendline that it was never able to close above coming in now at around 170.50. Day to mini
AAPL had an inside day today and is oversold. 330 area is a good wall of support and with three days under the floor trader pivot, a move above 333.18 could give it some short covering power especially if the market firms. First area of resistance is at the 10 day moving average at 338.59, then the 50 day moving average and a good target up to 341. Another one I would not short if the market weakens, but certainly one I would go to from the long side given its oversold condition and the still bullish weekly formation. Day to mini.
BBBB this is my wild card trade. Had a huge move up on April 19 to 50.26. After the selloff, today it touched and held the 50 day moving average at 41.13 and the 70 day exponential moving average at 41.46. With the risk so clear under these moving averages, buy above the FTP and 41.87 looking for a rally first up to the 10 day moving average at 43.50 and possibly beyond. Day to mini
DNDN this is one of those stocks that is very hard to buy on strength and whenever I do, I wind up getting stopped out. Therefore, I like the overall chart formation, the fact that the moving averages that were converging now starting to accelerate some to the upside, and the fact that it broke out although couldn't close above the last three weeks of consolidation. However, I will not buy this on strength and only on an opening range reversal against today's low 39.38. Looking for a move up to 43.25. Day to mini.
LULU**10 day moving average comes in at 96.33 with today's low 95.91. That gives us a good tight risk to work with should this continue to firm tomorrow. Still has the overhead trendline to get through which will happen if it can close above 98.80. In that case, can see a move up to 106 as the next target. Day to swing.
Hon. mention: ANF provided it holds today's low 74.12 and the 10 day moving average at 74.61. All-time high was made last week 76.76. FSLR tried the opening range reversal and even though it never broke S1 did not stay with it. Now, the FTP comes in at 124.72 and would be willing to try again using today's low 123.65 as at risk. If you can clear 126.59, the 10 day moving average has the potential of making a move up to 132. Day to mini
Shorts:
SINA**broke down beneath the 50 day and 10 day moving average. With an inside day today, resting on the 70 day exponential moving average at 108.38. Would look to either sell against today's high 111.90 with a very tight risk above the 10 day moving average 112.23. Or, against the FTP at 110.17 with an opening range breakdown especially if it takes out today's low 109.12. Or, if it gaps beneath 108.38 using the opening range high as a tight risk and looking for a move down to the last swing low at 104.21 with better support underneath at 95. Day to mini.
GOOG**provided this stays beneath the floor trader pivot at 520.14, would be looking to short especially under 519 with confirmation under yesterdays low 513.40. Still see this heading down to the 200 weekly moving averages 505. Day to mini.
Goodnight!
