After hammer candles and possible reversal patterns, all followed through to upside leaving big questions on whether or not the market will head back to bullish phases (all still in warning) or having failed the 50 DMA, begin to test much lower prices. And it is this transitional phase that has dominated last 3 weeks while earnings season is in full gear. New divergence last 2 days with gains in real estate, transportation and financials and losses in semiconductors and retail. Tough time to hold positions although with AAPL earnings beat, perhaps the market will get some relief.
S&P 500 (SPY) Through 138 a much better picture. Otherwise, respect the warning phase.
Russell 2000 (IWM) Holding weekly and monthly longer term moving averages. The daily chart indicates either a move over 80.15 is necessary soon or lower prices in store
Dow (DIA) Cleared R1 and held with small gap higher. Now must hold the gap low or will be seen more like failure at the 50 DMA
NASDAQ 100 (QQQ) An open above Tuesday's high a good sing. A move back above the 50 DMA even better
ETFs
GLD Tried and failed 160, which is keeping this looking vulnerable
XLF (Financials) Good close on the intraday highs and back over the 50 DMA which is where it needs to stay.
IBB (Biotechnology) Still in a bull phase with a DOJI day
SMH (Semiconductors) Gap and close lower. Now oversold but has some work to do to indicate any bottoming type action
XRT (Retail) Never tested or cleared Monday's high and sold off holding an exponential moving average yet not oversold.
IYT (Transportation) After hammer candle, gap higher and close over 50 DMA. All good signs
IYR (Real Estate) Been writing about the strength in this group since last week and now back at looking at 63.00 recent highs to clear
OIH (Oil Services) A weekly close over 40.00 would improve the technical pattern. But if does not make it, still a great place to go for weakness
XLE (Energy) After the reversal from the lows, back over the 200 DMA and a swing position long manageable
TBT (Ultrashort Lehman 20+ Year Treasuries) After the reversal from the lows, back over the fast moving average and a swing position long manageable
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: Some new longs were recommended from last night's list and tweeted today. Geoff will be with you through May 4th. Have a great week!
AAPL-will gap higher over the 10 DMA-can watch for a 5 min Opening Range breakout or a 30 min Opening Range Reversal. If it opens below 595, would think more short than long
Category 1: (Aloha) Positive Phase, Condition 1, 2 days under the FTPs, Risk to Previous Day low, Can buy 1/2 over FTP and 1/2 over R1, Target- Day to at least 3 ATRs from entry:
HOG Max risk 49.35 and like to see it hold 50.45
Category 2: (Pipeline) Positive Phase, Condition 2-3, 2 days under the FTPs, Risk to Previous day low, Can buy 1/2 over FTP and 1/2 over R1, Target- Day to at least 3 ATRs from entry:
ROST Must hold 59.39 and clear today's high to stay long
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:
AIG Must hold today's low
AXP Must hold today's low
COF Must hold 54.00
SLG Should hold 76.00
PNC Prefer OR reversal against 65.00
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:
MAKO (Not oversold) 3 days under pivots must clear 40.40 and hold 38.93
BRCM Oversold and post market suggests might gap higher back over 200 DMA at 34.57
EOG (Not a condition) After slingshot pattern closed on the 160 EMA with a DOJI. Must hold today's low
Shorts:
MUR Cannot clear 53.21
ANF Cannot clear 48.10
BTU Should not clear 30.48
MOS Must not clear 50.98
PPO Must not clear 36.90
RIO Must not clear 55.62 and break 54.06
Goodnight!
