The week ended with devastating news and our hearts and prayers go out to the families in Connecticut. The week also ended with no resolution to avert a fiscal cliff which was reflected in the 2-day correction. S&P 500 held onto its bullish phase if only marginally as did the DOW. The Russell 2000 remains in the best shape with an inside day. NASDAQ followed through on its breakdown after a confirmed bear phase, but landed on some support from early December levels. Looking to follow strength rather than buy weakness as the week begins.
S&P 500 (SPY) 141.80 is the 50 DMA which is sloping down. A break under and will be harder to stay positive. But, an open over Friday's high and we could see renewed buying Subs: Pivots Negative with Friday high and R1 lining up
Russell 2000 (IWM) Inside day. A range break down will bring it to the 50 DMA and up, possibly to a move to 86.00 Subs: 3 days under negative pivots which makes R1 important
Dow (DIA) A hold of Friday low and a much better start to the week. Subs: Pivots Negative
NASDAQ 100 (QQQ) Confirmed bear phase. Last Death cross was in August 2011. Afterwards, it chopped around until December 2011 when the phase improved. So, if this is a mirror image, then one might assume that how it looks here in December 2012 does not bode well for the start of 2013. Subs: Under 64.47 breaks a lot of recent support
ETFs:
GLD Inside day. Really, not much to say
SLV Not looking too good right now-the 200 DMA could be calling
XLF (Financials) 15.92 key support. Then, the 50 DMA becomes critical or a move back over 16.08 keeps picture good
IBB (Biotechnology) 136.50 is key support
SMH (Semiconductors) Dropped to the 200 DMA Subs: If stays at these levels will look for a reentry
XRT (Retail) See the 200 DMA and what could be a make it or break it as we end this year
IYT (Transportation) Subs: Like to see it hold 91.90 for a reason to buy more
IYR (Real Estate) On the 50 DMA and another sector beginning to erode unless it runs from here
XLI (Industrial Spdr Fund) Subs: 12/12 now looking like a slingshot
USO (US Oil Fund) Inside day. Under 31.00 and a leg down is very likely
OIH (Oil Services) Great short which we took profits on and now oversold
XLE (Energy) Confirmed strong warning phase with yet another reason market could be vulnerable.
TBT (Ultrashort Lehman 20+ Year Treasuries) Could not confirm the recovery phase going back to unconfirmed bear phase
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.
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:
TROW 2 Inside days. Outperformed. Max risk 63.64. Like over Friday's high and R1
CP Could be a slingshot but closed above the low of the reversal day Friday. Had 2 DOJI days and inside day. Over R1 clears Friday's high
EV smaller ATR. Friday's low max risk. Once it clears 31.48 could see new leg up
MTZ Has to hold Friday low. R1 and Friday high line up.
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:
AIG Improved in condition to a 2. Landed on the 50 DMA. Max risk Friday's low 33,66 has to clear R1 and Friday high
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:
SLAB Really like the OR reversal that occurred Friday but it was late in the day. 41.98 key support. Like to see it clear 42.95 for new highs
ANF Hammer candle and has to hold the 10 DMA 46.25 to stay viable
C Long on reversal Friday. Sideways consolidation looking to add over 37.82 and hold 36.83
ASML only over 63.80 would consider a buy with risk 63.25 the pivots
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:
PVH Oversold inside day choice of risks. Either the 50 DMA for swing or 107.70 Thursday low for mini. With 5 days under pivots, has to clear 108.70 then Friday high
PHH On the 50 DMA which means Friday low max risk. Close to 2012 highs which if clear looks good
Phase Change: POT Inside day. Long on reversal from Friday-will follow the range breaks. JNJ 3-day correction with 70.41 max risk and move over Friday's high good FDX Seems like reversals are better for risk. Sitting on the 50 DMA 89.70. WYN Could not confirm phase change to warning. Had an inside day. EL On basis of original swing should still be in. Now, unconfirmed phase change to bullish. 60.37 is the 50 DMA to hold.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
PRGO Narrow range day after the big move. Keeping this on list if cannot clear Friday high
DVN R1 should be resistance
BBBY 2 Inside days. Risk 58.53
AVB confirmed phase change back to bear with an inside day. 133.20 max risk
LEN phase change to warning. Risk 37.50 level max
Bye for Now!
