Today’s commentary prepared by Jonathan Griffin, Assistant Director of Trading Education and Research at Marketgauge.
All last week, Mish wrote extensively about holding onto the older more established long positions looking for profit targets, on new long trades, tightening the trading timeframes looking for the “quick “ money and looking for shorts as hedges when applicable.
All turned out as stellar advice.
Mish will be back on Monday with more commentary as we head towards the end of a tumultuous 2014!
See below for my comments on the indices and various sectors and groups.
Thanks!
S&P 500 (SPY) Gapped higher and held the gap with a possible reversal candle, we will need a second day to confirm Subscribers: Positive Pivots in all
Russell 2000 (IWM) Gapped over 116.75 and then proceeded to sell off back under that pivotal level.
Dow (DIA) Another new high close, yet not very pretty!
Nasdaq (QQQ) Put in a new high then dropped to close the gap.
XLF (Financials) Needs to hold the 10 DMA now at 24.14
KRE (Regional Banks) Nasty sell off from the intraday highs, failed to close over 40.00
SMH (Semiconductors) Another new high close
IYT (Transportation) Needs to close over 164 and hold that level
IBB (Biotechnology) Quiet still
XRT (Retail) Possible slingshot high
IYR (Real Estate) Broke out over the recent consolidation, now needs to clear 76 and hold
ITB (US Home Construction) Possible slingshot needs a second day to confirm
GLD (Gold Trust) Failed to clear the 50 DMA now at 116.06
GDX (Gold Miners) 20.46 now the 50 DMA to clear
USO (US Oil Fund) Cleared the 10 DMA, needs to hold
OIH (Oil Services) Needs to clear 46.12 to really get going
XLE (Energy) Cleared the 50 DMA and held
XOP (Oil and Gas Exploration) Failed to clear the 50 DMA at 62.80
UNG (US NatGas Fund) Unconfirmed phase change back to recovery
TAN (Guggenheim Solar Energy) Subscribers: Couldn’t quite clear the 50 DMA
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Closed above the pivotal area at 120
EEM (Emerging Markets) Gapped over the 200 DMA and held
EWP (Spain) Subscribers: Failed at the 50 DMA again
EWW (Mexico) Subscribers: Gapped over the 200 DMA for an unconfirmed phase change to Warning, next needs to clear the 50 DMA at 67.56
SGG (Sugar) Subscribers: Tried but still could not cross the 50 DMA at 41.73
****Note: With the gap up on Friday we see very few low risk setups. We will reevaluate on Monday
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: N/A
Category 2: N/A
Category 3:N/A
Category 4: N/A
Phase Change:
TEX cleared the 50 DMA now needs to hold and confirm the phase change, Needs to hold 30.00 and like on an ORR with risk to under the 50 DMA-swing
BAX Gapped over the 200 DMA but failed to hold. Needs to clear 72.57 once and for all, risk to 71.80
KSS Unconfirmed phase change back to accumulation –needs to hold PDL and clear 58.29
CYH Needs to hold 47.60, still like with risk for swing
PM unconfirmed phase change to bullish needs to hold 86.08 and clear 87.26 with risk to under the 50 DMA
NAV had as a short pick on Friday, now needs to hold the 200 DMA at 35.68 like best for an ORR. Next resistance at 36.50
Shorts:
*** NOTE: with the relatively weak close in the IWM we may look to short IWM
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NFLX Like best for an OR high failure
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
