Market went out exactly as one would expect after an historical run up: quiet and basically unchanged. Except for Biotechnology which continues to make new highs, the other stronger sectors took a breather-Retail and Real Estate both had inside days. The Financial sector closed red, but with no real damage done, same with the Semiconductors, Transportation and Homebuilders. Gold and silver finally caved in, getting whacked hard. Oil and Energy weakened as well. Monday could well set the tone for the entire week. A couple of weeks ago, I speculated that perhaps the market is divorcing itself from the Russell 2000 and the ratio of higher rates, better market, lower rates weaker market, better gold. NASDAQ closed on new 2013 weekly highs as did the Dow and S&P 500. Therefore, a major focus for the coming week is those relationships and how they continue to line up with one another. That, and how the US dollar fares.
S&P 500 (SPY) A one day correction may not be enough to clean out some of the weaker longs. But, what will help us ascertain a correction from something far more insidious is if this can hold 156 level. Subscribers: Negative pivots in all indexes
Russell 2000 (IWM) Has room to 92.00 without looking too horrible. It also will look a lot better back over 94.00
Dow (DIA) Inside day-overbought on all indicators-a key the way range breaks, especially for the other indexes
NASDAQ 100 (QQQ) I like the push back to the highs that occurred at the end of Friday's session. 70.58 in its midst but it must also hold 69.25 area.
ETFs:
GLD Wow. A perfect example of following the overall trend and not getting too seduced by short term pops. Now, a bit oversold so most likely will spend some time digesting.
XLF (Financials) 18.24 is the support level, 18.48 pivotal and 19.50 the ultimate target.
IBB (Biotechnology) New highs yet again-amazingly strong.
SMH (Semiconductors) 35.00 held: the day this gets over 36.17-look out above! Subscribers: Over 35.50 now, especially on a closing basis, will add to an existing long and not a bad place to start a new one if not in
XRT (Retail) Inside day on the highs.
IYT (Transportation) Although lagging on this move, still see this as a longer term trend up. Subscribers: 107.50 the 50 DMA to hold. Back through 110. Move should continue
IYR (Real Estate) New highs the last 7 trading days. Overbought-yes.
USO (US Oil Fund) Gapped and crapped. Lower oil prices never a bad thing
OIH (Oil Services) Unconfirmed warning phase with some big names reporting end of this week.
XLE (Energy) Unconfirmed warning phase-sloppy chart until it breaks 80 or 76
TBT (Ultrashort Lehman 20+ Year Treasuries) So much for the island bottom. Glad we waited for the 200 weekly moving average to clear which you now need a telescope to see from here.
XOP (Oil and Gas Exploration). Subscribers: Out of the swing long with profit-now aside til it sets up again
XHB (Homebuilders) 30.00 an area to cross and close above.
SGG (Sugar ETF) Subscribers: Started a long position in SGG but since the ETF is so much thinner than the futures, using 18.00 in the spot sugar as a place to hold or fail.
FXI (China) Subscribers: Got out Friday to lock in conservatively since this remains in a weak phase. However, with the slingshot low still in place, considering a reentry over Friday's high.
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: Make sure you begin to track when your instrument might report earnings and exit before!
Category 1: (Aloha) 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)
*NOTE: Lots of picks from last week ended with one day under pivots-not enough to be a category 1 or 2 nor the proper setup for a category 3-i.e. UPS QCOM P AIG. But will be watching these names and others nonetheless
AOL Inside day. Through 39.41 and really 39.80. this could finally make a move. Support Friday's low
F Inside day and not overbought 13.40 good close support and over 13.58 could see another push over 14.00
CREE Strong day and prefer a reversal to control risk, but will watch for opening range risk as well.
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:
NTES On the 50 DMA which means has to hold Friday low and take out Friday high to confirm. If this can get through 56.00 at some point, looks great
Phase Change:
NVDA Unconfirmed accumulation phase and 12.85 the new risk point to hold
ALXN Needs to clear 100.78 soon or will fizzle out-watch the 200 DMA as well
BEAM Like the confirmed phase change back to bullish with Friday's inside day, making Friday's low max risk.
YUM 67.00 support and over 67.95 should continue to around 70.00 or better
MGM Friday's low max risk after a bullish engulfing pattern. Ultimately needs to clear 13.50, but would look for an entry if holds the 50 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
APA 76.00 area good risk. 74.00 some support which it needs to break.
AAPL Reports 4/23 but now 430 should be resistance and if breaks 420 next time there, another leg down looks obvious
Bye for Now!
