After the shooting star formations in the Dow and S&P 500, in order for that to just go away, the highs from Tuesday in both have to be taken out. Otherwise, it is fairly bizarre action to be hovering up here near the highs while in overbought territory. And, volume remains super light. Therefore, have to assume the market wants higher, although other than massaging existing positions and cautiously entering longs on ones that are not extended, not seeing a whole lot to do safely right now. S&P 500 (SPY) 140.92 has to clear and caution under 140.
Russell 2000 (IWM) Closed over 80.00 on anemic volume. 80.57 the week high to watch and now 79.75 an area to hold
Dow (DIA) Over 131.89 shooting stars go bye bye and under 131, would exercise caution.
NASDAQ 100 (QQQ) After the inside day, this eked a close above the prior day high. 66.92 weekly high to clear. 66.40 to hold.
ETFs: Note that all the weakest ones this week, Thursday, held previous day lows
GLD 157.96 recent swing high since this changed phases. Bullish engulfing pattern but like most instruments, very light volume.
XLF (Financials) Shooting stars on the daily chart remain unless this clears 15.06.
IBB (Biotechnology) 132.00 key to hold as this continues its slumber
SMH (Semiconductors) This took out the possible shooting stars so perhaps a harbinger.
XRT (Retail) 2 inside days in a row-definitely getting ready to do something Subs: Video discusses this
IYT (Transportation) 91.10 still key to cross
IYR (Real Estate) 64.26 today's low worth watching Subs: Like to see yesterday and today's high clear before getting too excited
USO (US Oil Fund) Inside day
OIH (Oil Services) 41.68 is a weekly moving average resistance area. Curious to see what this has.
XLE (Energy) Although overbought, evidence of how follow through after inside days can work
TBT (Ultrashort Lehman 20+ Year Treasuries)
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: Anything that is on this list is a candidate for a swing trade-(of course market condition is a factor) -use the max risk mentioned along with an opening range stop using fudge factor and time confirms. I suggest you decide on 1 or 2 that have a risk you like and then position size accordingly.
Picks-if not on list could mean already in play. Please ask me if unsure. Been some awesome swing trades if traded by the rules.
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:
COF Although cleared the pivots, really want to see this clear R1 56.81
EWW really want this to hold over 62.90 or will exit on Opening range breakdown. Otherwise, clearing 63.17 would be more positive
LNKD Narrow range day-narrowest in 142 days. Like to see today's low hold, clear 105.35 then today's high
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:
ACE inside day, 4 days under pivots. 72.80 max risk. Has to clear 73.12 first
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:
WFM 93.43 has to hold and then of course, trade is to see if clears recent highs and keeps going
DLR Never broke the 30 min OR. Should now hold today's low
MOS recent swing high 59.06 to clear now with 58.00 support
AAPL Inside day. If stays over 620, could see this go higher especially if market stays firm
PCYC Over 58.00 should continue provided today' low holds
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry: N/A
Phase Change: WPRT Inside day, positive pivots. 36.21 good risk VMW unconfirmed phase change to accumulation provided 96.25 holds PXP inside day, positive pivots although closed 3 days under. Max risk 40.84. CTXS Back to unconfirmed warning phase on big vol. Now has to hold 73.80 BWA 2 inside days. 69.00 pretty close risk SINAUnconfirmed recovery phase. 50.55 max risk
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
COH Cannot clear 56.27
WLP Cannot clear 57.38
NKE 95.71 good tight risk
NFLX 2 inside days in a row-could mean either way, follow the range break
LULU 58.37 max risk and ideally, today's low should break
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative 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
ANF Ran right up to the 10 DMA and is only a short under S1 and today's low or if cannot clear today's high for a day to mini at most
Bye for now!