A few considerations for active traders: 1. Lots of earnings this week-lots-which means besides the strong GOOG report from last week and this afternoon’s pop in NFLX-many small caps to S&P 500 stocks have yet to weigh in. 2. The intermediate term indicator (McClellan Oscillator) is on the cusp of a sell signal in the S&P 500. It didn’t signal as of Monday’s close because of the final push up, but worth watching for that if weakness prevails Tuesday. 3. The ultrashort TBTs confirmed the reversal pattern established last Friday. That snowballed into a selloff in Real Estate and Homebuilders. 4. Tuesday brings the jobs report ahead of the opening.
Oil also got hit. If history repeats itself, the dominoes effect of higher rates can strike other areas of the market as well. Otherwise, it was an inside day in the Dow (when the trading range of the day is inside the trading range of the day prior). NASDAQ reigns supreme holding the runaway gap from last Friday. The small caps are holding their runaway gap, but Friday’s low is not that far away. The S&P 500 digested with a doji day. Transportation and Semiconductors are where it’s at. Biotechnology continues to exhibit faded glory. Mixed bag.
S&P 500 (SPY) 173.50 Friday’s low is key to hold. Subscribers: Positive pivots
Russell 2000 (IWM) 109.83 is last Friday’s low. Although the market remains strong, a break and close below that level-fair warning.
Dow (DIA) Laggard-and for good reasons-IBM! The last big rally that peaked in September, this was the first one to falter. So, keep eyes here
Nasdaq (QQQ) NFLX-I salute you today
XLF (Financials) Doubtful 20.96 is a double top, however, with an inside day, an interesting range break to follow
SMH (Semiconductors) New highs, holding the runaway gap
XRT (Retail) Digestion
IYT (Transportation) New 2013 highs again
IBB (Biotechnology) 202.00 is the 50 DMA to hold
IYR (Real Estate) Could be just a retreat from the 200 DMA to fuel up for a push beyond. A lot will depend on rates
XHB (Homebuilders) Closed right on the 200 DMA and huge inflection point
USO (US Oil Fund) The 200 DMA is coming up
OIH (Oil Services) Could be a brick wall high-another aspect to be concerned with.
XLE (Energy) Another possible reversal from the highs
XOP (Oil and Gas Exploration) The candle on this one is also alarming if confirms with more downside.
VXX Subscribers: Another brick wall bottom if confirms over R1-the risk is to the low 12.57
EWG (Germany) New highs by one tick
FXI (China) Like 38.00 as support to hold
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) 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)
CTSH Reports November 7th. Over today’s high should continue provided it holds 86.00
DOV Confirmed phase change to bullish. If 88.50 holds ready to resume move to 92.50-93.00
BBBY Cleared the 10 DMA and R1. If holds 76.60 area then could see move to upside although it has upside resistance from 9/26 candle high
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:
TEX Reports October 23rd. Kept small position and have to exit by Wednesday. Inverted Hammer doji day making 34.00 a good level to hold
AFL Reports October 29th. Inside day has to clear R1 and today’s high and best risk is S1 for possible move to 68.75 or so
Phase Change:
K Reports November 4thEven though is sold off, it came back through the 50 DMA confirming the recovery phase. 60.75 support and like over 61.36 R1
COV Reports November 8th. 2 inside days above the 200 DMA making 63.00 max risk. Follow the range break from today
KRFT Reports October 30th. Nice push off the 50 DMA. 53.49 good risk with upside to 55.50-56.00
PAA Reports November 4th. Unconfirmed recovery phase. 51.00 is a good risk with possible move to the 200 DMA overhead
ESRX Reports November 5th. Unconfirmed phase change to bullish. Has to hold S1 63.71 max risk and confirm with a close over the 50 DMA to see 66.00 area
PM 2 inside days. R1 lines up with today’s high and has to hold today’s low near the 50 DMA. Can see move up to 90.00 the 200 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
EXPE Reports October 30th. Inside day. Under 47.87 takes out S1. Risk then is today’s high
SGEN Reports November 5th Risk today’s high snd looks attracted to the 200 DMA at 36.20
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
JAZZ Bear flag forming if breaks S1. Then can use the 50 DMA for a swing risk
Bye For Now
