Ok, so make that a line from Mamas and the Papas: "Monday, Monday; Can't Trust That Day!" The Dow is back over 14,000 and even Ben Bernanke admits that higher rates is GOOD for the US economy-something this armchair economist has been writing about for a long time! But, before we put flowers in our hair, let's think about a couple of technical factors in play. The good news; the Dow and mainly due to IBM, closed on new highs eliminating the brick wall candle. S&P 500, NASDAQ, and most importantly, Russell 2000 have not gotten beyond Monday's nasty candle and of those 3, only SPY crossed back over the fast moving average. Finally, TBTs-good run for the money today, but still in a warning phase as the 50 DMA remained elusive. However, in the mirror image- TLTs, bear phase is intact. Mixed, fun and reasons to show up again Thursday!
S&P 500 (SPY) Crossed the fast moving average at 151.44 which should now hold although ultimate support at 150.30. Resistance Monday high 152.86 Subs: Pivots positive in all indexes
Russell 2000 (IWM) 89.75 area support. 90.90 resistance to clear Subs: It seems really the one to watch for next move-failure or back over the 10 DMA
Dow (DIA) After the inside day yesterday, this was the place to be. New multi-year high close.
NASDAQ 100 (QQQ) Back to unconfirmed bullish phase. Now, has to clear the fast moving average and hold the 50 DMA
GLD 154 support and now an inside day Subs: Will look to short under S1
XLF (Financials) Got over 17.50 which now needs to hold and the fast moving average has to clear
IBB (Biotechnology) Overall still sideways for 2013 but a very clear range has emerged to follow up or down. Subs: 148-143.50 is the range
SMH (Semiconductors): 35.40 Monday high to clear Subs: 34.69 or S1 should really hold if today was real
XRT (Retail) Monday high has to clear here as well
IYT (Transportation) Wow. The run happened so fast early on today, I just watched awestruck. Subs: 107.16 point to clear
IYR (Real Estate) 68.88 recent highs to clear
USO (US Oil Fund) 2 Inside days. That to me is a follow the range break candidate Subs: With positive pivots and the 200 DMA right here, would follow up if risk is in line
OIH (Oil Services) Monday high also key Subs: It's all about the 80 monthly moving average as tomorrow is the last day of February
XLE (Energy) Would be real interesting if this turns out to be a doji month.
TBT (Ultrashort Lehman 20+ Year Treasuries) Kissed the 50 DMA Subs: Through 66.00 on a confirmed Opening range setup with good risk and I will look to get long
DVY (Select Dividend Index) Another Inside day and clue to follow the range break early on
XOP (Oil and Gas Exploration) Subs: I like the chart but it does have some overhead so want to see some digestion before we jump
XHB (Homebuilders) Subs: Nice move but still a place I would look for a rollover if breaks S1
UUP (Dollar Bull) 22.20 is support at the 200 DMA
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 great potential setups but to limit choices, I am forced to go with the ones that have the cleanest risks. However, some if have OR reversals can be great buys-like EQT IBM for example.
Category 1: (Aloha) N/A
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)
BSX R1 and the 10 DMA line up with S2 the ongoing risk
ISRG Really needs to clear 580 and it will be all about risk
OSK Never really went anywhere but still has a good chart. Risk now today's low and has to clear R1
SWK Made a great move but if good should hold 77.34 the 10 DMA and continue up to 79 area and maybe beyond
HOG If holds really 51.50 but prefer to use the 10 DMA 52.00, then like for a possible move up over recent highs and beyond
UTX Also has to hold the 10 DMA but for a strong US economy imagine this could do well
CAM would use a tight risk to 64.00 to get in to see if this can get over 66 and move up to new multi-year highs
ROK Another one that has to hold 89.96 the 10 DMA and could see a move up to new multi-year highs
GMCR Signaled today and should hold the 10 DMA if good
Category 4: (Rip Tide) N/A
Phase Change: BTU If clears 22.05 confirms a slingshot low. NTES Have to wait for it to cross R1 at 52.31 and really like after a doji day. Max risk now 50.70 RAX Slingshot low in place. I really like the 3 shooting stars and over 55.46 R1 will buy with risk to 54.35 BZH Confirmed warning phase with today's high and R1 lining up SLW had an inside day after a possible slingshot low which means has to clear 32.68 YELP Back to unconfirmed accumulation phase. Has to hold 21.55 X Slingshot low yesterday confirmed today. 21.59 clears the 200 DMA DFS Slingshot low confirmed and holding the 200 DMA at 37.64
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BIDU Inside day. Neutral pivots. Took a small short home and will risk to 90.49 area and add under S1
Bye for Now!
