Whoa, what low volume drama to end the week. Shooting stars now looking like launch pads for a move higher. Of course, the overbought Relative Strength Indicators give one pause, especially with low volume; but one thing we know-things overbought can get more overbought.
S&P 500 (SPY) Over 140.92 it's 2012 highs or bust. Remain cautious under 140.
Russell 2000 (IWM) 79.50 significant support. 80.00 still pivotal and over 80.60 next stop 81.84 or higher
Dow (DIA) Closed over 131.89 putting the shooting stars to bed. Also overbought on the RSIs, but not sure how much credence to give that considering the chart patterns.
NASDAQ 100 (QQQ) Could not close above the weekly high 66.92 which means, the synchronization of all four indexes is always a key to the overall puzzle. 66.28 to hold.
ETFs:
GLD 157.96 recent swing high since this changed phases. 156.20 is key to hold to give this enough muscle to power through that resistance
XLF (Financials) Shooting stars continue to loom on daily chart unless this clears 15.06. Support now 14.79.
IBB (Biotechnology) Held 132.00 beautifully and now could be ready to play catch up. Subs: 133.33 is R1 to cross.
SMH (Semiconductors) Checked out the monthly chart. If go back to 2002, peak low then and peak low in 2008 starting to look like double bottoms. Each year it's made lower highs until 2012. This year it has made a higher high than it did in 2011. A monthly close over 36.20 sometime this year and could be the monster mover for a long time.Subs: looking into long term options plays (LEAPs). For now, is a bit overbought and would love to see some correction.
XRT (Retail) Textbook-2 inside days, breaks the lows and drops to the fast moving average keeping the bull trend intact. Subs: 2 days under pivots. Has to first clear 60.06 then 60.52.
IYT (Transportation) 91.10 still key to cross
IYR (Real Estate) Under 64.00 and a lot of enthusiasm in this group will fade. Back over 66.21, party on!
USO (US Oil Fund) 35.37 has to clear for another leg up.
XLE (Energy) Another interesting monthly chart. Just need a pullback to enter right now.
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-Focus on phase or condition changes, inside days that performed on par or better than the market, and condition 1-4 with good corrections to major reference points, low risk.
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:
LNKD 103.78 max risk. Like to see Friday high clear
RHT 55.66 the 10 DMA max risk. 57.21 the FTP to clear, then Friday 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: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:
AGU Negative pivots so over R1 and 98.00 should continue up. Support 96.00
EWW Bullish engulfing. Slightly negative pivots. Now want to see 63.41 clear and will add to existing longs
LMT 90.45 good risk with a continuation over 91.00 could see up to 2012 high and beyond.
MMM Approaching overbought but just cleared a lot of congestion. Provided 91.40 holds, will watch for reversal or breakout
AAPL 615.26 is max risk, 619.64 S1 closer support and like to see 622.70 clear.
SYK 52.61 max risk. Over 53.37 should get great follow through
PCYC Over 58.00 should continue provided 55.25 holds
WFM Sold off and has negative pivots, but improved condition to a 1 since 10 DMA now positive slope. Max risk 93.44.
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:
AMZN 228.66 max risk. If clears Friday high would get back in with closer risk 233.00
Phase Change: DE Unconfirmed phase change provided 79.20 the 200 DMA holds. Has to clear 79.85. IBM ph1st time over 200 was nothing there. Now, with big move late Friday, thru 200 should see follow through. Risk 197.80. MSI Hanging out on the converging moving averages. Max risk 47.36, 4786 better and over 48.32 clears R1. VMW Inside day. Positive pivots. 95.92 max risk. CTXS 75.10 good support BWA Nice move Friday. Now, a reversal would be a good pullback to buy if 70.00 holds.GS 102 max risk and want to see it clear 103.56 then the 200 DMA
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
COH Cannot clear 55.45
NKE 94.88 risk
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 Inside day so now has to break Friday's low and S1.
Bye for now!