Expectation for correction was right on and now, with resistance at the last swing high in S&P 500 from 10/19 met today along with an ensuing close on the intraday lows, SPY looks more negative in the short term. NASDAQ held around the resistance levels from last few weeks, but also made a new 2-month high and turned down. Therefore, see more of a correction/digestion mode as we head towards the weekend.
S&P 500 (SPY) As the 10/19 high turned out to stop the move up, now looking at 143.85, then the fast moving average. Subs: Pivots negative in all indexes and possible slingshot high here, especially if gaps lower or closes lower.
Russell 2000 (IWM) Inside day and a doji which means small caps still healthiest. Now question is can they hold up the rest of the market. Follow the range break.
Dow (DIA) One of the ugliest inside days. 132 is support to hold or could see move down to 131. Otherwise, over today's high would be very positive.
NASDAQ 100 (QQQ) confirmed phase change to accumulation. 66.30 area would be real strong sign if holds. The 200 DMA essential support. Subs: AAPL inside day but could not clear 535, exited tail. Note the possibility of a slingshot high in QQQ as well.
ETFs:
GLD As expected, inside day right on the 200 DMA. Subs: Could see a short covering rally off the 200 DMA over today's high
SLV Landed on the 200 DMA and a bit oversold.
XLF (Financials) A lot of bank stocks could have had key reversals today after a big run. 16.30 support now. Subs: Another possible slingshot high if follows through
IBB (Biotechnology) Subs: Looking for a short as mentioned in today's video
SMH (Semiconductors) Under 33.20 could see some selling coming in. Otherwise, still looks strong in its new phase. Subs: Another possible slingshot
XRT (Retail) Subs: Slingshots everywhere if they confirm
IYT (Transportation) Overbought but very strong and great buy on a correction. Subs: No slingshot here
IYR (Real Estate) 63.75 is the 50 DMA to hold or could get ugly. Subs: At bottom of channel featured on today's video
USO (US Oil Fund) Unconfirmed phase change to recovery if 32.32 holds
OIH (Oil Services) Subs: Yet another slingshot. Will watch bottom of channel
TBT (Ultrashort Lehman 20+ Year Treasuries) Inside day. Subs: If this is good, 62.00 should remain a distant memory
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 and 2: N/A
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:
PVH if holds 110.70 area should see 119 if market stays strong
F 11.70 pivotal and still looks strong but hard to chase.
CP Long. Now, needs to clear 102.21 to get explosive and hold 100.
MON Inside day but really has to clear 93.00 for new leg up
WHR Been a bit wild, but does have an inside day with today's low max support
WBC Inside day with 2012 high 63.67 to clear and today's low to hold
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:
DISH* Oversold and tested but came back above the 50 DMA. 35.41 has to hold now with a bit of a fudge to 35.25. Like to see it clear R1 36.08
Phase Change: CNQR 66.88 Tuesday low should hold now to get the move to around 72.00 JWN Today's low like to see hold and could see a nice pop to 54 or better NVDA 12.80 is a key area to break. BXP inside day at an inflection area which means could be a short or long depending upon on how the range breaks. JBHT If clears 58.80 and holds today's low
Shorts: Daytraders-Slingshot high possibly: INTU ROK LULU GS COST
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
RRC Closed under the 200 DMA making R1 64.05 a good risk
ALXN Death cross and failure of the 200 DMA. Risk is 96.75
CXO Should not clear 83.00
MJN 66.40 now max risk
BIG Has to break S1
Z Look for an OR high failure against 27.26
Bye for Now!
