The market followed through to the downside as the correction from the highs part deux. Volume is light. Critical support is still holding and the overbought conditions are abating. Friday could be interesting as the unemployment numbers will be out before the market opens.
After tonight's report, you will be receiving daily updates from Geoff Bysshe, President of Marketgauge. I will return February 11th. Trade well!
S&P 500 (SPY) A bull phase correction is pretty much the sum of it. Healthy as far as I can see. Subs: 2nd day of Pivots Negative-149.50 the 10 DMA. Close but not perfect, today's high and R1 line up.
Russell 2000 (IWM)Inside day and strong with a close back above the fast moving average. That tells me that tomorrow should shed light on whether this will resume the rally from here or break down further. Subs: Pivots Positive
Dow (DIA) Interesting candle-new highs, close on the lows.
NASDAQ 100 (QQQ) In the month of January, this had traded in 1.00 range from 66.50 to 67.50. I love that since we know what to do once that breaks one way or another Subs: Pivots Negative
GLD Failed the 200 DMA which is why we look for 2 days to confirm a phase change. Now, this is back to a bear phase, but again, unconfirmed Subs: Still see this as able to go either way from here
XLF (Financials) After 2 inside days, held the fast moving average. This looks like a correction at this point and not the end of the bull move
IBB (Biotechnology) Even though this turned green, still looking a bit heavy unless it clears 146.80.
SMH (Semiconductors): 34.00 still a great area to hold. Subs: Pivots Positive
XRT (Retail) Defended 66.00 for sure. Through the recent highs hard to argue with
IYT (Transportation) Closed just shy of the fast moving average, but still beneath our long exit price Subs: I believe this has more to go this year
IYR (Real Estate) Winner of the best correction! 66.50 should be a support area
USO (US Oil Fund) Subs: Keep your stops under S2 on swing trades
OIH (Oil Services) Did not end the month over the monthly moving average, but a good place to look at for the upcoming month
XLE (Energy) Subs: Possible slingshot here too but with a doji above S1-not real clear
TBT (Ultrashort Lehman 20+ Year Treasuries) If this drops to 66.00 would reenter the long position Subs: Possible slingshot-more confirmed
XOP (Oil and Gas Exploration) Subs: Watch the 10 DMA now to hold
XHB (Homebuilders) Looks toppy but managed to hang onto the fast moving average.
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: Lots of picks also meant to give you a working list into next week as well as many are my favorite for 2013. Have a couple of stocks for the daytrading crowd on the focus list that look good, but are reporting very soon: AFL ORLY HOT
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:
FDX* Correction and now R1 and today's high line up with risk to today's low real tight
MOS* Through R1 clears today's high and 60.85 area is the 10 DMA to hold
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:
AAPL Emotionally, I would like to see this rally. But looking at the chart, it had 3 days to bust a move and could not. Inside day. Follow the range break down with 458.20 good risk area.
URBN Narrow range day. R1 and today's high line up-like that
PRU Has to hold today's low and clear R1 which lines up with today's high
FCS* If can hold today's low and clear 15.04 could still have a shot.
USG* R1 and today's high line up. Also the 10 DMA is there as well
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)
TRIP 46.50 next hurdle and should hold 45.70
LNKD* Today's low on the 10 DMA is max risk and R1 today's high line up
BAX* Probably one of the better setups if can hold 67.41 and can get through 68.22
KMP Inside day. Closed right on the 10 DMA. Through R1 89.48 looks good
A Reports 2/14. Bullish engulfing pattern. Through 45 looks good provided it holds 44.60 the 10 DMA
C Through 42.30 area, clears last 3 days of resistance. If market recovers, this has room
TS Held the 10 DMA and really needs to clear today's high and R1 and close up there
DO* Inside day. R1 and today's high line up. 74.25 is the 10 DMA to hold. Has a lot of room to upside.
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:
RIMM -Note will change its symbol soon-After a huge correction, popped back over the 50 DMA end of day. I like that R1 and today's high line up with risk 12.80 or so
F Held the 50 DMA and would have bought it today at 12.90 if I weren't leaving town. Through 13.10 clears R1 with 12.80 a good support area
Phase Change: RHT Filled a gap perfectly. Now, should hold today's low and over today's high clears the gap PNC Good compression. Don't lose track of this one MSI* If 58.36 holds, like it over 59.00 TSL Nice end of day move. Look for 5.05 to hold FSLR Slingshot low in place if can get over 28.46. 27.67 risk
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ALXN Reports before open 2/7. Provided it stays under 95.04 could be see 91.50
COH 51.74 max risk with recent lows 50.47 and some support a the 200 weekly moving average 49.78
ESRX 53.83 max risk
FCX 35.45 max risk with a break of today's low weak
Bye for Now!
