For now, while we await the FED meeting to yield anything tangible other than the usual rhetoric, the market is telling us that the recent rally was to resistance, and even with the positive phase, euphoric calls for new highs are premature and right now unwarranted. Question now is whether or not this couple of days of digestion with low volume will offer support near the lower and positive sloping fast moving average in the S & P 500.
S&P 500 (SPY) 136.65 is low of the day it gapped higher. Now support to holdSubs: Cannot discount a possible slingshot to look out for. Pivots now negative so must clear R1
Russell 2000 (IWM) Never gapped higher and has been a concern throughout this whole recent rally. Will remain defensive unless it breaks 80.00
Dow (DIA) 127.95 is the gap low to hold now. Back through 130 would be encouraging
NASDAQ 100 (QQQ) Inside day. 65.31 remains the number to clear and 64.00 the number to hold.
ETFs:
GLD If this can get to 155 and hold, will look for a fresh buy opportunity
XLF (Financials) 14.85 last swing high.Subs: 14.50 becomes important again.
IBB (Biotechnology) Closed out the month keeping the longer term uptrend intact, but the nearer term looks like more correction if breaks 133.53
SMH (Semiconductors) Hammer candle under the 200 DMA. Subs: Has positive pivots which means over 32.40 could be a could key to market
XRT (Retail) Support down to 58.48 the 50 DMA.
IYT (Transportation) Subs: Tried this today on the reversal but got out before the close-had a shot to continue after holding the 200 DMA, but closed weak. Now, must get back above 91.00 or more trouble
IYR (Real Estate) Still holding 65.20 which means beneath will also be vulnerable.
USO (US Oil Fund) 32.20 next support after island top
OIH (Oil Services) Back under 200 DMA
XLE (Energy) Holding the 200 DMA provided 69.30 holds
TBT (Ultrashort Lehman 20+ Year Treasuries) Subs:14.50 support to hold.
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: Inside day is a short-term trading pattern I always look for on digestion days. Today, I am also including condition stocks with 2 or more days under the floor trader pivots.
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:
MOS DOJI, 2 days under pivots. Has to hold 57.57 and should clear 58.10 then 58.60 and ultimately 59.06
NSC 2 inside days. Has to hold 73.39 to keep in a good condition , closer support 73.72, then has to clear 75.23 recent high
COF Has to hold 56.00, clear 56.44 then 56.90.
COST Has to hold 95.50, then 96.11 then clear 96.66
FRAN Has to hold 30.88 clear 31.55 then today's high
HSY Inside day. Has to hold 71.15, clear 71.85 then 72.12
MMM Has to hold 90.28, clear 91.24 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:
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:
TWC 84.52 max risk with 86.30 all-time high still to clear
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:
Phase Change: WFM Bull Phase, Inside day. 91.43 max risk, has to clear 91.95, then today's high ACE Bullish phase, inside day, positive pivots, has to hold 73.14 IR positive pivots has to hold 42.05
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CXO 88.21 now resistance and 83.54 next point to break
EL 53.54 should not clear. Prefer OR high failure to control risk
NKE Watch for OR high failure to control risk provided 95.50 doesn't clear
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
A Reports 8/15. 38.77 the 50 DMA resistance not to clear and has to break 37.96 S1
MCD cannot clear 89.80 and should break 88.85
Bye for now!
