Another low volume drift with the most significant phase change in the DOW with the confirmed distribution. Also significant is that NASDAQ held onto the 200 DMA keeping the warning phase intact and Russell 2000 or the small caps held onto their bullish phase. With S&P hanging out in the warning phase still within reach of the 50 DMA, next move is to follow either NASDAQ down if breaks under the 200 DMA or, if holds, follow everything else up!
S&P 500 (SPY) Held the fast moving average with the 50 DMA now at 142.12 Subs: Negative Pivots
Russell 2000 (IWM) Wrote on Sunday that the way it breaks on Monday should help to set the tone for the day and possibly the week. It's maintaining the strong phase provided 81.75 holds. Subs: Pivots Negative
Dow (DIA) Closed below 129.75 the line in the sand, which means if does so a second day, a real reason for bulls to be cautious. Back above 129.80 a relief with some minor support at 129.25 the fast moving average. Subs: Pivots Negative
NASDAQ 100 (QQQ) Held the 200 DMA at 65.50 marginally with a distribution day in volume. Subs: AAPL, 572 is key support which if breaks 555 next stop. Above today's high and looks a lot better
ETFs:
GLD Gap lower with support at 163.50
XLF (Financials) Until this clears 15.85, hard to get too excited about the market. 15.43 should be support
IBB (Biotechnology) Holding the 50 DMA which could be a good sign if continues
SMH (Semiconductors) Began the week under 32.00 or the 65-weekly moving average. Like to see it end the week over that level Subs: Over 32.43 and the prediction of a strong SMH into 2013 looks more likely. Til then, out of its way
XRT (Retail) It could be just resting, but better wake up soon or at least hold 62.50
IYT (Transportation) Subs: Like that R1 and today's high line up and will add if takes that level out
IYR (Real Estate) Cannot clear the 50 DMA and until it does, the 200 DMA might attract it
OIH (Oil Services) Death cross last week but with a positive close and a DOJI candle
TBT (Ultrashort Lehman 20+ Year Treasuries) Really want to see 60.50 clear to get excited about the market
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:
TRMB Like over today's high and R1 provided 54.90 holds
CRM If holds around 156.90 and can clear R1 like for a move to 165
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:
CP Bullish engulfing pattern and a condition improvement. The 10 DMA at 92.90 should hold
TEX Inside day. Over R1 24.46 could see 2012 highs and beyond
REGN Inside day right on the 10 DMA. 182.08 R1 to break along with today's high
TRW Made new 2012 highs today. Like to see 51.00 level hold.
CELG Until it clears 80.00 will be volatile.
SLAB Over 42.00 looks good with support and risk today's low
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:
SHW oversold daily RSI and very close to key support at the 50 DMA, plus inside day. Over 152 clears pivots and over 153 clears R1
Phase Change: EL Today's low has to hold and clear 59.39 R1 AIG Good sideways digestion and real close to the 50 DMA so worth watching BAC Still waiting for 9.97 to clear VRTX Inside day and really, still holding the slingshot low CHRW Inside day and bullish golden cross. Today' s low very manageable risk for a starter long position
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BHI 43.00 should not clear and has some support at 42.00
JOY Shouldn't clear 56.60 level
AGU Inside day after a big selloff from the 50 DMA and now 101 area resistance 95.50 support
LQDT 2 inside days which means today's high good risk
EQIX 184.79 max risk. Could see move to 174.50
PNC Under 55 looks like it could see drop to 50.00
Bye for Now!
