Prepared by Geoff Bysshe, President of MarketGauge, filling in for Mish until September 4th.
While I'm filling in for Mish you can follow my swing and daytrading in real-time in our trading room (instead of twitter) called "Daytrading with HotScans" here: https://marketgauge.com/?page_id=1232
All 4 indexes don't agree. The DIA is looking like it wants to roll over and test Friday's low, but the IWM looks like it wants to go higher. The Q's never went lower and the SPY's are following the DIA - reluctantly.
It was another slow, trendless day. If the markets do not make a significant move by 11:00 in either direction, I think you can expect the same directionless action we've seen thus far this week in the afternoons.
S&P 500 (SPY) Stopped right at 141 (well 140.97). That's still my number for turning more bearish, but the big number is Friday's lows. Expect resistance at 142 and then 142.30.
Russell 2000 (IWM) This turned out to be the best performer today.The levels to watch beyond today's range are 81.86 as resistance, and support the 80.50 level and then 80.11 low from Friday's low.
Dow (DIA) Still the weakest index. Today it was unable to break the 20 DMA, and the 10 DMA is now bearing down on that 20 DMA. If markets get weak I'll look for short trades here. Until this gets above the 131.60 level I see it as a drag on the other 3 indexes. After that there is 130.80 as resistance as well. 130.06 is the low for support from Friday's low. If the other markets are holding up this level will to, but if all 4 markets are falling hard this level will not likely hold up.Next stop is the DMA at 129.
NASDAQ 100 (QQQ) Still the strongest index the key levels are defined by last week's range. As long as AAPL is not falling apart I'd look to buy intraday reversals above 68.20. 68.15 should be good support as its today's low and the 10 DMA.
ETFs:
GLD We now have 3 days within its Thursday range so we could get a significant move in either direction if this range breaks, 162.45 - 161.23. with three days of flat action I think it's time to consider longs on a breakout - 162.45 is the number.
SLV I said it yesterday too - It needs a rest.
XLF (Financials) Sitting under the 10 DMA after a second constructive day of rest. Key level to break on the upside is 15.30, and on the downside 15.00 is the major support.
SMH (Semiconductors) It came right down to the support level I spoke about -32.60. It is also right on top of the June highs, and the 200 DMA so it should hold, but I'll wait for a close over the 10 or 20 DMA before I consider the long side.
IBB (Biotech) Inside day and... As long as this can hold over 135 it looks good.
XRT (Retail) Managed to close over 61 by a few pennies. If it takes out today's high it looks like a good long trade.
IYT (Transportation) I don't see anything here.
IYR (Real Estate) Closed over the consolidation I've been talking about, 65.31. If it pulls back look for support at the 65.30 and 65 level.
USO (US Oil Fund) It still looks bullish, but I feel it's too subject to what happens with tropical storm Isaac and talk of the government tapping strategic reserves. So with the weather and the government moving this market on a whim, I'll just watch.
OIH (Oil Services) Yesterday I said I wouldn't buy weakness and it got weaker. Now I'd just stand aside. If it breaks Friday's low of 40.44 it's got room to drop.
XLE (Energy) Not quite as heavy as the OIH, but I'd still wait and see.
TBT (Ultrashort Lehman 20+ Year Treasuries) It reached the 15.40 objective I've been talking about, a basic way to look for a reversal back to the upside would be to wait for the prior day's high to be broken or even better, closed above. The same is true for the TLT's in reverse. Until then let it continue down, or more likely, consolidate.
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 along with a fudge factor and time confirm. I suggest you decide on 1 or 2 that have a risk you like and then position size accordingly.
TWC Tried to move higher today but fell back. Still looks good. Max risk 89.30
FFIV Look for OR reversal over 100.50. Max risk 100.80.
DTV Inside day with yesterday's low at 52.28 just below today's, 52.31. Max risk 52.18
IBB Thin trader but as long as it holds 135 it looks good. Tomorrow look for an OR reversal over 135.50. Max risk 134.80.
ROST Second inside day. If it breaks 70.05 it could start a new leg higher. OR reversal against today's low, 69.35 would be interesting too. Max risk 68.95.
IYR closed over three weeks of consolidation. Should hold 65.00 now. Max risk 64.88
LULU Nicely trending. I'm only looking for an OR reversal over 64.20. Max risk 64.
LNKD Finally broke 107 and had good volume today. Breakouts are a possibility, but prefer a reversal over 106. Max risk 105.20.
AMZN Good volume and good action today, but still consolidating under all time highs. The last 2 days have lows at 243.12 and 243. S1 will be 243.81 so I'd like to look for an OR reversal over 243.80 with a stop under 243.
TGT very strong morning with good volume but came all the way back. Must be over 63.70 to get in. Max risk 63.24.5.
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:
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AGN Stayed under a wall of resistance at 85.00 all day. If support at 84.40 level is broken it has clean shot at 82.81 then 81.28. Look to short against 85 and short breakdowns below 84.40. Max risk 85.60
SNDK It is coming off its third attempt to break above its 200 DMA. If it breaks 42.09 it could accelerate to the down side. 41.92 may be some support, but I'd consider 42 and then 40.35 the levels to watch. Look to short reversals or breakdown against 42.85 or breakdowns below 42.09. Max risk 43.10
A Broke down from a bear flag today with plenty of room left to fall. R1 and the Monday low line up at 37.30 so that is a good risk point for reversals or breakdowns. Max risk 37.50.
TCK Opened higher and fell apart trading under its 30-min OR for the whole afternoon. The key support level is 28.74 then 28.60. Even though it closed on its low and near the low of yesterday its pivot stack is positive. I'll look to get short below 29.30 on a reversal or breakdown. I'll also keep the risk tight - max 29.50.
Best wishes for your trading,
Geoff Bysshe
