Commentary and analysis by Jonathan Griffin and Geoff Bysshe while Mish is away until April 20th.
Yesterday’s question was “is a 2 day rest enough?” and today it seemed to be enough for the IWM to breakout to another new high and get up over 1% intra-day.
It was a solid up day, but the SPY, QQQ, and DIA still remain below key resistance levels. Energy led by higher crude oil was the standout group of the day with the XLE up 2.4%. This was followed by a very strong performance by the Semiconductors (SMH) up 1.8% which puts it back into an unconfirmed bullish phase.
Additionally the financials (XLF and KRE) acted well and this is the area to watch tomorrow as C and GS report earnings tomorrow.
The key area to watch to indicate strength is the SPY over 211, and the first sign of concerning weakness would be for the IWM to break below yesterdays close.
S&P 500 (SPY) Gapped higher on the open and then chopped at resistance until finally clearing 210.63. Now 211.27 needs to clear and then 212.24Subscribers: Positive in all.
Russell 2000 (IWM) New all-time high. Yesterday’s bounce off the 10 DMA gave this the push it needed to clear resistance at 126.39. 126 now support.
Dow (DIA) Doji day at the high end of its range. Needs to clear now over 181.75 and hold 180.00
Nasdaq (QQQ) Still unable to clear resistance at 108.20. Support at 107.14
XLF (Financials) Looking for a close over 24.46 now. With 24.30 good support.
KRE (Regional Banks) Very strong move after the inside day. Would have liked to see this close over 41.84. Great support at today’s lows.
SMH (Semiconductors) Managed to reclaim the 50 DMA now at 55.94. Needs to hold that level going forward.
IYT (Transportation) Had a nice gap higher on the open but showed weakness by selling off to under the 200 DMA. Then came back just enough to hold the warning phase on the close.
IBB (Biotechnology) Trapped by the resistance around the 362 area. Needs to clear 363.63.
XRT (Retail) Weak day after the gap higher and still trapped in a range between 100 and 102.50.
IYR (Real Estate) Broke support at 77.84 now could see a visit down to 76.33 or even 75.81 the 200 DMA
ITB (US Home Construction) Would like to see this clear 28.63 and hold there.
GLD (Gold Trust) Rallied back over the 50 DMA for an unconfirmed phase change to recovery. Would like to see this hold todays lows and clear and close over 116.26 the 100 DMA.
USO (US Oil Fund) Crude inventories gave this a boost today. Took out resistance at 19.18 and rallied right into the 100 DMA at 19.73. Now needs to clear 20.29 the Feb. high.
OIH (Oil Services) Very nice move over yesterday’s high. Now needs to clear 39.58 to be free of this base it’s been in since Nov. 2014.
XLE (Energy) to close the gap put in on 11/26/2014 this needs to clear 85.15. 81.17 now good support.
XOP (Oil and Gas Exploration) Cleared 54.21. Now needs to clear 58.40
TAN (Guggenheim Solar Energy) Really interested to see what happens at 51.00
TBT (Ultrashort Lehman 20+ Year Treasuries) Tried to clear and hold the 10 DMA, however it did not have the power!
UUP (Dollar Bull) Looking a little choppy at this point. 25.83 needs to hold.
IFN (India Fund Inc.) Consolidating over the 50 DMA
FXI (China Large Cap Fund) This looks like it wants to go higher still!
EWY (South Korea) Still strong!
RSX (Russia) Very nice move over the 200 DMA to give us an unconfirmed phase change to accumulation.
CORN (Corn) Over 26.00 gets interesting
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 2, Intermediate-Term Positive 5, and Long-Term Positive 6, aggregate makes it a positive 13. Still in a trading range within a trading range but with a bullish tone for longer term trades. 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)
INCY 2 Inside days near the highs. Like over 101.40.
STT Reports 4/24 Inside day like over 76.75 with risk under PDL for a day to miniswing
CIEN Inside day near recent high’s. Like over 21.58 with risk down to 20.50 area for a swing.
MA consolidating over the 50 DMA. Like on a move over 89.70 with risk under the 50 DMA
LEA Inside day near the highs. Like over 114.73 for a day to mini
Category 4:N/A
Phase Change:
SWK Unconfirmed bullish phase. Like over 97.26 with risk under the 50 DMA at 96.73
Shorts: Focus List: BBBY WFM WM
Category 5: N/A
Category 6: N/A
Best wishes for your trading,
Jonathan Griffin, Assistant Dir. of Trading Research & Education
Geoff Bysshe, President
