It seems our Economic Modern Family comprised of The Russell 2000s, Retail, Biotechnology, Semiconductors, Regional Banks and Transportation ETFs are a solid herd. Remember however, that the Chinese New Year encompasses goats and rams as well. That must explain how as a family unit or herd, they pretty much stay together; yet as individuals, some morph into rams or goats depending upon if they feel like climbing mountains or simply bleating at the fence.
Checking in on our Economic Modern Family: The Russell 2000s took a backseat (or a more sheepish position) to the rest of the herd. 125.60 is a good number to watch clear and 122 to watch hold.
Biotechnology’s held over 344 and now needs to clear 360. Retail held on, more goat than ram-like and now needs to keep its footing at 100 and soar past 102. Semiconductors took the permission we gave it on Wednesday to take the lead and like a true proud Ram, closed above the 50 DMA.
Regional Banks haven’t quite hurdled over 41.20 yet. Now, 40.00 becomes even more important. But the pleasant surprise came from our Transportationsib who jumped back over the 200 DMA and seemed to stabilize the rest of the family as a result.
With interest rates rising and the Long 20-year Treasuries back in an unconfirmed warning phase under the 50 DMA, commodities lost some ground. However, not too badly in both sugar and cotton. Gold dropped but held 114, what I see as the best underlying support. Oil continues to hold the 50 DMA as long as it stays above 17.80 the closest important support level.
Everything pretty much continues to trade in a range of its own, chopping around, with the occasional slaughter or clean getaway (until realizing it’s now separated from the herd. Then it finds its way back to the herd or the range). There are many examples of both scenarios. Thursday we saw a lot ofsemiconductors take off with Solar City one of the larger gainers. The slaughter came to the real estate sector and some its instruments.
Point is at the end of the day, we see a lot of rotation, but the family basically remains intact, holding each other up in check, not letting anyone stray too far.
I am breaking out of my range and heading to vacation starting Friday, returning Monday, April 20th. I hope you all keep these images in your mind and stay calm.
Jonathan Griffin, my assistant will be keeping up with the commentary, but more focused on the individual Indices and ETFs.
Peace out and thanks so much for your loyal follow!
S&P 500 (SPY) Confirmed Bullish Phase. 209.36 next resistance and 207 support. Subscribers: Positive Pivots in all
Dow (DIA) Confirmed Bullish Phase. Over 180.16 best case, otherwise, like to see it continue to hold 177.70 and better still, the 50 DMA
Nasdaq (QQQ) Confirmed Bullish Phase. 108.20 and over a very good sign. 107 support and then 104.70 the major underlying support.
XLF (Financials) Confirmed Bullish Phase. The consolidation is notable. Has to clear 24.30
SMH (Semiconductors) Unconfirmed Return to a Bullish Phase.
IYT (Transportation) Really like to see this hold the 200 DMA and get more north of it. Otherwise, good barometer should it fail
IBB (Biotechnology) 344 a near term support level.
XRT (Retail) Consolidating so now major worries at this point
IYR (Real Estate) Here’s the one that separated from the herd. March support comes in at 76.30 area now
ITB (US Home Construction) Has snap whenever it drops which makes this very much a contender over 28.50
GLD (Gold Trust) Low volume decline with 114-116 the range for now to watch
OIH (Oil Services) Big day here clearing resistance at 35.50
XLE (Energy) 78.00 support and over 81.00 looks great.
XOP (Oil and Gas Exploration) Inside day
TAN (Guggenheim Solar Energy) Another great performance
TBT (Ultrashort Lehman 20+ Year Treasuries) 42.79 is the 50 DMA even though the TLTs broke its 50 DMA
UUP (Dollar Bull) over 26.00. Should keep going now
IFN (India Fund Inc.) Cleared the 50 DMA.
EWW (Mexico) Like to see this hold 60.00.
FXI (China Large Cap Fund) Wowza-again
EWY (South Korea) Like this
RSX (Russia) Getting closer to the 200 DMA
CORN (Corn) Over 26.00 gets interesting
SGG (Sugar) 13.00 in cash next place to clear
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
***NEW: Market Tone: Short-term Positive 3, Intermediate-Term Positive 4, and Long-Term Positive 7, aggregate makes it a positive 15. Still in a trading range within a trading range but with a bullish tone. NOTE: Market Tone is updated before the open each day and reported to you on twitter.
Category 1:N/A
Category 2: N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy an 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)
NXPI A good day to miniswing candidate with an inside day. Has room to 105 and beyond.
ETFC Now for a day to mini must hold 28.00. Like over today’s high
Category 4:N/A
Phase Change:
PNRA Has to clear 166.23 hold today’s low
PCAR cleared the 200 DMA at 63.00. The risk would be 62.40
BZH like over 18.25 risk to 17.64 for a swing
GERN Still like and now even more if holds the 80 month moving average.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
DISH 73 good resistance and has to break 70.58 for a day to mini
Category 6:N/A
Best Best wishes for your trading,
Michele Schneider
