After inside days and a long weekend, good start to market with the gap higher, a gap which held throughout the day. One could also say that the possible basing action is now more probable, with a move to test some higher level resistance more in the cards. However, advisable to stay focused on the strong warning phase. Best way to do that is to control risk, adjust position size and allow profits to run.
S&P 500 (SPY)As long as 132.75 holds, next stop 135.50 area. Subs:Had an accumulation day in volume. Positive Pivots
Russell 2000 (IWM) Provided 76.50 holds, next resistance 78.20. Subs: Pivots Positive and actually approaching overbought on daily RSI
Dow (DIA) Can see 127 if 125 level holds
NASDAQ 100 (QQQ) Still concerning regardless of the gap day. Reason being that it closed within and not above the basing action of the last 2 weeks. Needs to clear for more confidence. Subs: 62.30 now area to hold
ETFs:
GLD Fine example of what a bearish phase looks like when it gaps higher then fails the gap low. Big bear candle now.
XLF (Financials) Closed right at last week's high. Still waiting for a weekly close above the weekly moving averages.
SMH (Semiconductors) Return move over the 200 DMA which gives this an unconfirmed accumulation phase
XRT (Retail) Will watch the 50 DMA now at 60.50 as resistance
IYT (Transportation) Also about to test the 50 DMA
IYR (Real Estate) 61.45 support as it is at the 50 DMA and has to power through or will be a warning sign for the whole market
USO (US Oil Fund) Still no heartbeat
XLE (Energy) Could not close over 66.45 even though traded above intraday. Another possible warning on today's rally
TBT (Ultrashort Lehman 20+ Year Treasuries) TLT closed under the fast moving average.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. Note: Not listing anything with an RSI over 92.00 but that does not mean it is not a good trade. If unsure, please ask.
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 Back to condition 1. 38.38 max risk
SWI Holding recent gains with new high close-max risk 46.85
TRIP After 2 inside days, provided 44.25 holds, 45.82 recent highs
CERN Improved back to a condition 1 with tight risk to 78.88 the 10 DMA
EQR Provided today's low holds, improved to condition 3. Resistance at 64.20 to clear
PPG Improved to condition 1 with all time high 107.95
LULU Not a condition but changed phase back to unconfirmed bullish with 73.37 good risk
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:
ALXN not oversold, but over 93.37, so close to the highs, could follow it up with stop under today's high 92.98
Other: COG In recovery phase but needs to clear the 200 DMA 35.38
Slingshots:PNC Long with stop under 62.22 X Long with stop under 22.00 EL Long with stop under today's lowKLAC Stop under today's low MCD Over 91.75
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NSC Inside day. Should not clear 67.28
GDX Should not clear 45.20
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
WLT Cannot clear today's high
Stocks in bearish or distribution phase with 5 days or more up as possibly ripe to short if S1 and/or today's low breaks JCP SHLD CNQ SODA
Goodnight!