From last Thursday's comments: "Equally prepare for a run back to 14,000 or another round of selling ahead of the weekend. A correction in a bull phase is that unpredictable." And so you have it. The Dow went out at 14,000. The market survived a stronger US dollar and evasive comments from the FED, although the writing does appear to be on the brick wall that low rates are unsustainable. This week begins with overbought conditions alleviated, nasty red candles at last week's high, but good (low volume) moves back over the fast moving averages. NASDAQ returned to its unconfirmed bull phase and many sectors shrugged off the correction handily.
S&P 500 (SPY) 151.90 next hurdle which if clears, will make the brick wall highs so last week! Subs: Classic opening range reversal after gap higher over R1-a chart formation to be studied. Pivots now positive
Russell 2000 (IWM) 91.20 overhead resistance to clear and like the other indexes, the gap low from Friday a critical point to hold Subs: Pivots Positive
Dow (DIA) Cleared the fast moving average. We can go back to looking at 140.36. Subs: Classic opening range reversal after gap higher over R1-a chart formation to be studied.
NASDAQ 100 (QQQ) Technical signals work. Wrote last Thursday: "66.60 a pivotal area." Friday low 66.59. Provided Friday lows hold, back in bullish phase with overhead resistance at the fast moving average.
GLD Death cross with 2 inside days. Subs: Over 153 looks good to 156.70. Under 151.90 could see 150.00
XLF (Financials) 17.50 turned out the nice round number for support. Subs: 17.75 next hurdle then back to 19.95 target
IBB (Biotechnology) Great follow through after test of the 50 DMA. Now, a hold of 145.70 would be strong
SMH (Semiconductors): A move over 35.36 would be good, but ultimately has to clear 36.17
XRT (Retail) 67.75 is important resistance to clear. Weakest performing sector on Friday.
IYT (Transportation) Firmed Friday and still a good looking sector. However, does need to clear 107.16 Subs: That is the slingshot high for now
IYR (Real Estate) Bull phase, but wouldn't be surprised to see some more work at these levels before next move is determined
OIH (Oil Services) Subs: Will stay aside until we can see whether this holds or fails the 80 monthly moving average by February's end
TBT (Ultrashort Lehman 20+ Year Treasuries) The last 14 trading days have all been within the range of the big trading range made on February 1st. Subs: Inside day. R1 and Friday's high line up
XOP (Oil and Gas Exploration) Subs: Long Friday on opening range reversal and looking to add
XHB (Homebuilders) The thing about weak warning phases is that they easily go back to bullish phases as did this group
UUP (Dollar Bull) Confirmed phase change to accumulation Subs: Last week I talked about a strong US dollar and what it can do for the US Economy-it appears the old relationship between a rising dollar and falling stock market has shifted. Look for opportunities in sectors that support infrastructure and growth potential in the US
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:
AOL Inside day. Over R1 clears Friday high and has to hold 37.25
Category 2: (Pipeline) 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: (Opening range reversals are good on anything above S1)
OPEN* 54.32 no good point to hold but still really needs to clear 56.41 to keep going
MBT Made new highs not seen since 2011. 20.26 now support to hold
AXP Through 62.76 should see another leg up. 62.05 support
AGN Inside day. 107.25 good tight risk to hold with recent highs within reach
BSX A close over 7.50 and move up should continue
LVS Back to unconfirmed bullish phase. 49.80 support
ISRG Gapped higher over the 10 DMA. 571 now max risk
WHR* Prefer a reversal since this stock is a bit wild. But overall, still looking strong for 2013.
BEAM* 61.55 should hold and over 62.20 could get going again
P* Inside day. 11.80 support and like over 12.31 R1
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:
DO* Touched down on the 50 DMA and had an inside day. Friday high and R1 line up
Phase Change: YELP 22.41 is R1 22.00 now a good area to hold AFL* Still working the slingshot low. Cleared 50.00-now looking for follow through NTES Inside day. R1 and Friday high line up ACT Had a potential glass ceiling bottom if clears R1 and Friday's high. Inside day. CNQ Back to unconfirmed warning phase, inside day. Must clear 29.85 hold 29.50 HOG Almost an inside day. Through 51.50 looks good if holds Friday low RAX Possible slingshot low
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IACI* Should not clear 42.27 and with positive pivots, has to break S1
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day's lows
FDO Inside day. Has to break Friday low and S1
PETM 64.50 now max risk and has to break S1
Bye for Now!
