Totally makes sense that the week would end with many inside days in some indexes, plus many sectors and groups. The current phases could help in determining next direction, but they are mixed from bullish in small caps (Russell 2000) to bearish in the NASDAQ. S&P 500 closed out the week in a warning phase indicating a more "on the fence" phase or a "wait and see" if the small caps can boost the market up or if the leading stocks continue the drag down. Add to the mix uncertainty in Washington, one last day of 2012 ahead of another holiday-and it could just be a hurry up and wait until January 2nd environment, with cash the active investors' best friend.
S&P 500 (SPY) Friday nearly had an inside day taking out Thursday's low by a few ticks. Wedged between the 50 and 200 DMAs. Confirmed warning phase, not really oversold. Subs: 4 days under pivots which means must take out R1 which aligns with Friday high to get more positive.
Russell 2000 (IWM) Inside day and holding the bullish phase. If crosses over 83.40 good sign. But still has lots of room down to the 50 DMA 81.62. Subs: Slope on that 50 DMA is neutral
Dow (DIA) Took out Thursday low and closed weak in an unconfirmed phase change to distribution. 130 pivotal and resistance as the 200 DMA. 127 next support
NASDAQ 100 (QQQ) An inside day. In spite of the bear phase, the market internals are neutral in the short term and slightly negative in the long term. The weekly chart continues its uptrend but with weekly support looming sort of as a "dare to see if I break or not attitude." AAPL managed to defend recent lows. An inside day-so much of QQQ will depend on whether this can clear 519 or fail 500.
ETFs:
GLD Inside day and pulling away from the 200 DMA. Inside day suggests indecision while the distribution phase, makes it suspect
XLF (Financials) Inside day. Still in the best shape. But, until it crosses 16.44 aside
IBB (Biotechnology) Inside day and confirmed warning phase. Subs: Over Friday high better otherwise, see the 200 DMA next
SMH (Semiconductors) Marginally held the 50 DMA for now with an inside day maintaining a recovery phase. Subs: A good one to buy over Friday high but if fails, see 31.00 next.
XRT (Retail) One of the few ETFs that did not have an inside day and tried hard but failed to hold the 200 DMA.Now, in an unconfirmed distribution phase. Subs: Could be setting up to go either way. Weekly chart still shows uptrend but on the daily, has to clear 61.60
IYT (Transportation) Still in correction mode. Subs: Want to see what happens closer to the 200 DMA.
IYR (Real Estate) Besides financials, in a bull phase with an inside day. Subs: Above Friday's high good confirmation, but below, the 50 and 200 DMAs are close together so could slice below easily
XLE (Energy) Unconfirmed distribution phase unless it can get back over with a close above the 200 DMA.
UUP (Dollar Bull) Subs: Sitting long with stop under 21.60
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: In keeping aligned with calendar ranges, will most likely wait until after the New Year to get involved. Plus, will be sending youan extensive report of setups to watch for 2013 which you will have by the end of day Monday. In the meanwhile, here's a list of setups to watch for-make sure you narrow it down or wait until I do Monday morning.
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:
ASH Inside day and hammer candle. Over today's high clears R1 with risk Friday low
SODA Inside day holding the 10 DMA with 42.54 max risk. Weekly close above the Bollinger band with 2012 high 48.13
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:
TSO 42.50 now max support.Has to clear Friday high.
V Inside day and hammer candle. 147.90 max risk and over Friday high clears the 10 DMA
ADBE Hammer candle. If holds last week low, can move, especially if clears recent highs 38.25
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:
SWC 12.36 S1 to hold. Outperformed market. Over 12.50 looks good and it is over the 80 monthly moving average
NTGR One of the best looking daily and weekly charts. Pretty thin with max risk 38.50. 43.44 the 2012 highs
WBC Neutral pivots. Sideways but if market firms, a good place to go.
EXP Inside day and outperformer. Like to see 57.74 clear, Friday low hold
PHH If holds Friday low, still set up well with 2012 high made 2 weeks ago.
USG Over Friday high takes out the 10 DMA and this month crossed over the 80 monthly moving average
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:
GILD Not really oversold anymore but held the 50 DMA at 71.83. Now really has to clear R1.
ADS Inside day. 142.88 the 50 DMA with a move over Friday's high good for perhaps a daytrade and if closes well, perhaps longer
Phase Change: RGLD Inside day. If long, holding slingshot but go to a no loss stop for end of year VFC Inside day just under the 200 DMA.over 149.80 interesting if holds Friday low FCS Inside day. Small semiconductor with Friday's high, R1 and the 10 DMA lining up, risk 13.90 DVA Inside day. Like over Friday high for a swing with risk 108.60 EQT Like the weekly/monthly chart better, but had inside day with move over Friday high looking better JBHT On the 10 DMA which means Friday low max risk. KLAC Inside day holding a recovery phase. 46.56 max risk. Like over Friday's high DKS 2 inside days.. has to clear 45.45, hold 45. TGT oversold on weekly/daily. Hammer candle. 58.49 recent low
Shorts: Not much right now-prefer to wait
Bye for Now!
