The market managed to close out the week as crystal unclear. Is it basing at important support levels? Will the recent support turn into resistance? Naturally and not unexpectedly, 3 out of 4 indices had inside days on Friday.
S&P 500 (SPY)Over 132.85 next stop 135.50 area. Under 131.40 another test of 129.55 and then perhaps the 200 DMA. Subs: That level takes out everything-the recent highs, 160 EMA, R1, 10 DMA. Neutral pivots
Russell 2000 (IWM) No inside day here. Under Friday low will knock some wind from this index but not necessarily deliver a fatal blow. Over 77.00, next resistance 78.25.Subs: Pivots Positive
Dow (DIA) 125.60 has to clear as this index has been a drag on the market. 122.15 is the underlying 200 DMA
NASDAQ 100 (QQQ) Ended last week with 2 inside days in a row or what looks like a squeeze between 62.40 (the fast moving average) and 61.85 (an exponential moving average). It would be good to see some follow through one way or another.Subs: Pivots negative with 2 days close beneath. R1 and S1 are perfectly located to watch for a break either way-above or below.AAPL vulnerable. Watch that for a break of Friday low/possible short.
ETFs:
GLD Inside day after a key hold of the end of 2011 low. Can run easily up to the 50 DMA from here if Friday's low holds.
XLF (Financials) Inside day. Watch 14.10 or the 200 DMA at 13.72.
IBB (Biotechnology) If this were all one was watching one would think the market has some serious legs. 124 now key support
SMH (Semiconductors) Yet another inside day. Subs: 31.65 the 200 DMA
XRT (Retail) With the declining slope of the overhead 50 DMA, I am more inclined to be on the lookout for the bear flag forming from last week's incline.
IYT (Transportation) Inside day. 91.00 pivotal area
IYR (Real Estate) Weak warning phase, inside day as next week begins with Case- Schiller Home Price Index. Ordinarily, I do not write about fundamental factors, but the market is particularly sensitive to good/bad news at these levels.
USO (US Oil Fund) Somebody pulled the plug last week on range, volume and interest at these lower levels. Won't stay like that forever.
OIH (Oil Services) If market fails, considering this is not oversold, always a good place to go for shorts
XLE (Energy) Ditto. Only over 66.45, could surprise
TBT (Ultrashort Lehman 20+ Year Treasuries) TLT could not take out the all-time high, tested the fast moving average and ended with an inside day. Subs:Long TBT with 17.40 first real overhead resistance if holds 16.25
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:
N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy a opening range breakout or candidate for Opening Range Reversal, with Risk S1 or previous day low, whichever is lower unless noted differently, Target- Day to at least 3 ATRs from entry:
GNC Inside day. Above 10 DMA but a condition 3 since slope negative
SWI Negative pivots but keeping it here since held S1.
VVUS 2 DOJIs. 23.85 must hold
WPI 71.35 support underneath. 72.40 closer support for an OR reversal or breakout
TRIP 2 Inside days. 44.25 to hold. Still has room to upside
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:
AMZN Not oversold but holding its gap higher. Like to see 216 clear
Other: PEnded with an unconfirmed phase change to accumulation. 11.30 max support/risk.EWZ Must clear 53.00 for a new leg up. Stop now 51.40LGF Confirmed bullish phase. 12.80 now supportRHT Weak warning phase. 51.22 max risk. Inside day. Has to clear Friday's high
Slingshots:PNC Must Clear 62.70 X Like over 22.00EL Over 55.30 KLAC Over 46.45MCD Over 92.10 MCK Must hold 87.50
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
FCX Cannot clear 32.80
MOS Cannot clear 49.00
NSC Cannot clear 67.33
SLB Cannot clear 66.11
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
APA Needs to break Friday low and not clear its high
CAM have to flag a stock in bearish phase with 5 days up as possibly ripe to short if S1 breaksCNQ GDXHES same deal
Happy Memorial Day!