The key market indexes had a meager early morning sell-off in very quiet / light trading. Critical support is still holding and the overbought conditions are abating with more sideways action.
Tonight’s report will be from both Geoff Bysshe and Keith Schneider as Mish recovers from a nasty Flu. She will return as soon as she recovers. Trade well!
S&P 500 (SPY) This index had a doji day and missed an inside day by a tick. Market internals for this index is still strong. Subs: Positive Pivots. However, S1 and today’s low are lining up so caution under 151.40, otherwise we are still in gear.
Russell 2000 (IWM) inside day and strong with a close back above the fast moving average. Today’s quiet compression is a good setup for following breakouts. Subs: Pivots Negative. 89.95 is important support where the 10 day MA and S2 converge.
Dow (DIA) Inside day and still trying to close over 14,000. Negative pivots. Short term bias turns negative below 139 which takes out S2 and the 10 day. Otherwise, we are still in gear and might just be compressing for the big jump over 14000 and all-time highs.
NASDAQ 100 (QQQ) an inside day, small gains with positive pivots was most interesting. Subs: Pivots Positive and lots of compression that we are poised to move away from. AAPL coming back to life has helped with this Index and if it ignites it has wide- spread positive implications for all equities.
GLD Gold was the standout loser even as unrest in the Mideast spreads. Bad action for what should have been supportive to Gold is indicative of a bearish trend. Who needs the yellow relic when stocks are roaring? Subs: In this type of environment (good news, bad action) try sell strength (OR Reversals) unless we close back over the 50 Day MA, which changes our bias to long
XLF (Financials) This is one of the leading sectors and did not disappoint today as had the best performance of. Assuming the market continues its march up this sector should lead the way.
IBB (Biotechnology) This once leading sector continues to lag and could be putting in a top.
SMH (Semiconductors): 34.00 still a great area to hold. Subs: Pivots Positive and in gear for more gains. Good relative performance today.
XRT (Retail) Lots of compression at the highs but as with rest of the market still positive …pivots are a slightly negative
IYT (Transportation) Closed pretty much on its highs for the year and this sector was and is still one of our favorite picks Subs: This has more to go this year
IYR (Real Estate) after good news regarding housing prices and supply side issues, this sector is firming up after lagging the market this week. We would be more interested above 68.30 which are new highs.
USO (US Oil Fund) Subs: Best performing sector ETF today and has positive pivots with its close over the 10 day MA. However this is a laggerd for 2013 so far.
OIH (Oil Services) The oil services struggled today and closed under the 10 Day MA. A move over 45 on high volume would confirm a long term bottom
XLE (Energy) Subs: Inside day with a leading sector ETF this year… follow a breakout to new highs
TBT (Ultrashort Lehman 20+ Year Treasuries) The long term trend has shifted and this a buy dips market for a long time Subs: Lots of compression over the past 10 days affords a good entry above the R1 and today’s high which is around the 67.60 level. Other- wise wait for more weakness for a lower entry.
XOP (Oil and Gas Exploration) Subs: Watch the 10 DMA now to hold and potential Brick Wall reversal pattern today.
XHB (Homebuilders) Looks toppy and need to clear fast moving average to regain footing
UUP (Dollar Bull) This ETF could be completing a compound bottom
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:
NSM: Key area to clear is 37.35
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:
OMX: Held a big weekly support level of 10.45 after breaking inside day low. 10.60 area is support and FTP. Good swing stop is under 10.45.
OSK: Should be over 39.60. A break of 40.10 would be big breakout.
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: (Opening range reversals are good on anything above S1)
TRV: Closed just over very tight daily consolidation. Look for support over 78.90
C: 43.40-.50 has been tough resistance, but daily is very tight. Prefer to be over 43.00
TEL: Inside day with daily low just over big support level at 40.00. S1 and PDL line around 40.30.TER: Inside day right below key level of 17.30
AGN: Inside day right below key breakout level of 107.65-70.
IR Inside day with good support right below PDL at 52.77. Look for breakout above53.45.
FCS Inside day. Look for breakout over 15.41
BAC Positive Pivots with Wall of support at 11.73 area. S1 is 11.71 and PDL is 11.67. Also has a good breakout level of 11.90.
NUE Positive pivots with support around 46.80 and near S1 and PDL low of 46.50. Well positioned for breakout or reversal.
MCD: Trying to bounce off the 10 DMA. Inside day with PDH at key level of 95.33.
P Support at 11.78-.71. Good candidate for a 5 min breakout over 11.94.
SHW: FTP lines up with support at 164.00. Key level to break on the upide is 164.75.
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:
Phase Change:
CNX Big volume, key breakout level is PDH of 33.18
DLTR: moved to a recovery phase with big price action but low vol. The base is worth keeping an eye on.
FSLR Big volume. Look for support at 31.65.
RAX Moved over 50 and 10 DMA. PDH of 75.28 is key resistance. Next resistance at 76.15.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
APA Resistance area at 84.10 - .35. Key support at 83.50 and then some at 83.36
WY: Inside day could go up or down big.
NOV Nice bear flag against the 50 DMA. FTP area, 68.60 lines up with good resistance. Look out for support at 67.90
COF Sitting on 200 DMA. Watching for break of PDL of 56.33
LMT Bear flag into the 10 DMA. Should be below 87.60.
AMT Retrace to 10 and 50 DMA. Prefer it to be under 76.60
