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 still don't agree. Just like Wednesday, the IWM pushed higher but the other 3 (SPY, DIA, and QQQ) were weak. It was also another day where you were better served to expect a reversal of any move beyond the 30 minute opening range, rather than a continuation.
Ben Bernanke speaks from Jackson Hole Friday at 10 AM and the market is wait anxiously to hear what he has to say. However, the last 3 day's have created a consolidation that is tight enough to move this market in either direction before Ben has a chance to say anything. Watch the range of the last 3 days. If it is broken and there is follow through from the Opening Range look for last week's range to be tested.
S&P 500 (SPY) Stopped right at 141 (well 141.12) again. That's still my number for turning more bearish, but the big number is Friday's lows. It just missed hitting the expect resistance at 142 so it and then 142.30 are still my numbers on the upside. 142.08 is the 3-day high.
Russell 2000 (IWM) Again, the best performer of the day, and it stopped at 81.86 resistance as anticipated (high of the day was 81.96. That is the 3 day high to watch. It has not traded below a prior day's low since the Friday low so today's low is the number on the downside, 81.14. The next support ara is 80.60-.80.
Dow (DIA) Still the weakest index. Again, 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. 130.60 is a very important low for support. If that breaks, Friday's low is next at 130.06. If the other markets are holding over Friday's low it may not break hard, but if all 4 markets are falling hard the DIA looks very weak. Next stop is the DMA at 129.
NASDAQ 100 (QQQ) Still the strongest index the key levels are defined by last week's range, but showed some weakness today. The key level in AAPL is 670. In the QQQ 68.15 has been good support for 3 days. If both the QQQ and AAPL are below these respective support levels, Friday's lows are next at 67.60. Then look for the 20 DMA at 67.35.
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.
EW Moved into an unconfirmed bullish phase as it broke out over 101.50 and ran to R2 near 103, but it then retraced back to the breakout level. I prefer to enter over 101.50. 101.00 is the lowest I'd consider for an OR Reversal. Max risk 100.60.
DTV Inside day, and nicely consolidated after Friday's big move. I'd consider OR reversals down to the max risk at 52.30.
ROST 70.07 is a wall of resistance, but I'd like to get long when it breaks. I'm looking for a move like TJX had today. I'd also consider and OR reversal with 69.50 in the stop. Max risk 68.95.
LNKD Nice continuation with volume of yesterday's breakout of the 107 level. I would not chase it, but I would consider an OR reversal over 107.50. Max risk 107.
AGU Had a powerful bounce off the 20 DMA. I'd prefer an OR reversal above 97.60.
PNC At first glance I looks like it's just in daily consolidation. This is true, but today I had its highest close since May. What makes it more interesting is that its peers as measured by the KRE ETF had a strong day also. Look for breakouts or OR reversals above 62.20 with a max risk of 62.
TJX Big breakout to all-time highs. I'd only consider an entry down close to the 46.20 to 46.00 level. Max risk is 45.60.
WHR Has a bullish U-Turn pattern on the 10 DMA. Prefer an OR reversal over 74.20 area, but if the market is strong this is worth a breakout.
V bounced off support and the 50 DMA and daily lows near 126.50. OR reversals or breakouts over 126.00
CERN This is the only pick today that is not in a bullish phase. It is, however, bouncing firmly off a base at the 200 DMA. S1 lines up nicely with the Tuesday's high at 73.50. I'll look for a pull back to this level. Max risk is really 70.37 which is several ATR's away, but for probing to get in use today's low of 71.68.
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
XOP This ETF is not in a bear phase but is struggling at the 200 DMA. If it breaks down the 50 DMA looks like a good target at 51. Look for OR reversals or breakdowns below 53.30. The daily breakdown begins with a break of today's low at 52.85. Max risk is 53.52.
SWN Is a leader in XOP's weakness (see above). It's in a weak bearish phase. I looks like it has good support at 30.80, so be careful near that level, but look to see that breakdown. Also look for reversals under 31.40. Max risk 31.60.
OXY Another Oil & Gas stock that is at a tipping point. It's sitting right on its Friday low and 50 DMA. If it breaks it could go to 83 quickly. I'd only be short under resistance at 86.90, and prefer to be under today's low of 86.15. Max risk 87.20.
ORLY Has a very tight daily range that has lasted all month. Today it has a "death cross" which I don't consider a good timing indicator, but it does mean ORLY is in a bearish phase. Its pivots are negative and R1 at 86.63 lines up a good resistance area of 86.40 up to 86.70. Look for shorts against this level or a breakdown below today's low of 85.73. There is good support to watch for at 85.25 - 85.00. A good target is 84.50. Max risk is 87.00.
SNDK This is not a bearish phase but rolling over at the 200 DMA. The big number to break is 41.92 which is Today's low. 40 .35 is a good target. 42.31 is good resistance. Look for a reversal against 42.31 or a break of 41.92. Max risk 42.55.
A Is either basing or breaking down from a bearish flag. Today was an inside day so max risk is today's high of 37.31. Pivots are positive, so I'd prefer to be short only under 37.07, a key number today and under the FTP for Thursday.
Best wishes for your trading,
Geoff Bysshe