Looking to follow strength rather than buying weakness was the right advice/strategy as the week begins. We didn't quite see an accumulation in volume in S&P 500, but price action is significant in that it begins our acceleration from the 50 DMA and firms the bullish phase. NASDAQ did its best to retrace to the 200 DMA on good, not amazing, volume. Follow through would be great confirmation and a relief to many remaining sidelined investors as this remains in its bear phase.
S&P 500 (SPY) Looking a lot more like 2012 highs are in reach provided it holds 142.90 level Subs: Pivots Positive and will look for OR reversals in indexes after today's big move
Russell 2000 (IWM) Friday's inside day was a gift once the highs were taken out on early strength. 86.00 looks in the cards
Dow (DIA) 137 likely provided Monday low holds
NASDAQ 100 (QQQ) AAPL is the story here. Dropped to a Fibonacci number at 501.25 and ran. If this turns out to be a key reversal, follow QQQ over 65.50 the 200 DMA Subs: Only index would consider buying more strength. AAPL slingshot low
ETFs:
GLD This is so not the happening place right now
XLF (Financials) Opened up above 16.08 and off she went. 16.44 2012 high-can almost taste it!
IBB (Biotechnology) Could not take out Friday high, now an area to watch.
SMH (Semiconductors) Like to see it clear away from the 200 DMA now Subs: Still looking for a re entry
XRT (Retail) 63.40 key resistance after it did what it had to do to stay in the game
IYT (Transportation) Inside day
IYR (Real Estate) Jumped off the 50 DMA and underperformed. That means watch to see if 64.40 clears or weakness comes back for short opportunities
XLI (Industrial Spdr Fund) Subs: 12/12 now looking like a slingshot unless clears
GDX (Market Vectors Gold Miners) Inside day
USO (US Oil Fund) 32.11 has to clear or still vulnerable
TBT (Ultrashort Lehman 20+ Year Treasuries) Nice move back to recovery although unconfirmed unless 50 DMA holds
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.
NOTE: So many trade setups over the last 2 weeks put us ahead of the curve. Today's plan was excellent. If a trade is off the list it's because not good for a new entry at this point. With so many to pick from, a plan is essential to narrow focus
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:
AMGN 2 inside days and neutral pivots which means must clear R1
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:
EV Once it clears 31.48 could see new leg up
MTZ Has to clear 23.95 for a test of 2012 highs and beyond. 23.40 good tight risk
AIG Improved in condition. Over 35.04 shouold hold and risk 34.11 the 10 DMA
CHRW Improved to condition 1. 61.56 the 10 DMA max risk
ANF Had an OR reversal and still in play provided today's low holds
PVH Last Thursday, today and 10 DMA all line up-110.78. Over that level should see 119 if market stays strong
PHH End of day breakout against the 10 DMA at 21.83 (and R1). Will look for an improvement in condition. Close to 2012 highs which if clears looks good
F If 11.70 clears this has a lot more room to go.
VAR Has to hold today's low hold. 2012 high made recently
AGN Would like to see a reversal or risk close to the 10 DMA 92.40 good risk
WHR 99.75 now max risk and consolidating for possible leg up
MSI Over the 10 DMA 54.52 still see big potential for a swing with risk 53.78
UNP Looks like it could clear 126.20 if it holds 124.05
Phase Change: CSX Inside day although not really a phase change. Over 20.04 will look like it is basing POT looks good but needs to clear 41.31 now. JNJ If today's low holds, still looks good longer term VFC Unconfirmed phase change to warning provided the 200 DMA holds 149.65 CNQR Like on a reversal against the 50 DMA 65.84
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MJN Inside day and cannot clear R1 66.22
BIDU Like 96.70 the pivots as a risk.
JCP Cannot cross today's high which lines up with the 50 DMA
Bye for Now!
