An inside day-or a trading range within the range of Monday's big red day, was not only anticipated, but also a repeat of the pattern I wrote about that occurred on February 25th. Therefore, as a pattern to be respected, particularly in the 3 indexes that are still holding a bullish pattern (S&P 500, NASDAQ and the Dow), that makes Wednesday's trading range possibly the most decisive of the week. But, we cannot forget about 3 other trading events thus far-how gold, interest rates and small caps fared. All 3 of those instruments also had inside day trading ranges. In fact, most of the ETF sectors did the same, traded inside Monday's range. As trend followers, we take that as a bullish sign for the indexes and sectors still holding above their 50 and 200 Day Moving Averages.
S&P 500 (SPY) Inside day. Volume above average but not as much as yesterday's. Crossed the fast moving average. Unless this falls apart tomorrow, looks like Monday gave buyers a new opportunity. Subscribers: Pivots positive in all indexes
Russell 2000 (IWM) Inside day but remains it the warning phase, now confirmed. That means really want to see this cross back over the 50 DMA or not out of the woods.
Dow (DIA) Crossed back over the 146.50 level. Inside day. Still best shot of making new highs with IBM reporting April 18th.
NASDAQ 100 (QQQ) Inside day. Held 69.00. GOOG reports this week. Through 70.00 should bring renewed buying just as under 68, renewed selling
ETFs:
GLD After an inside day, the question of whether or not Monday's humongous volume indicated a blow off, especially considering 130 support on the weekly charts, or just a pause before another leg down remains. Good one to follow the range either way. For the record, even if gold runs, expect a move to fill the gap from Friday for now.
XLF (Financials) Inside day. Held the bullish phase, the fast moving average and now over 18.40 should continue its journey. Under 18.00 not.
IBB (Biotechnology) Inside day as well. Wasn't the biggest gainer of the sectors, but certainly right up there after commenting last night that this is a great place to go if market firms. Has to clear 169.35
SMH (Semiconductors) Unconfirmed return to bullish phase. Through 35.50 should be good for a test of 2012 highs and beyond. Subscribers: Reentered for a swing long, stop under 34.30 to see if this can finally gain some traction
XRT (Retail) Narrow range and inside day in its bull phase. A good one to watch for overall health of market
IYT (Transportation) Another one with an inside day under the 50 DMA for the continued warning phase. Subscribers: 104 the major support and has to clear 107.75
IYR (Real Estate) Also an inside day here. Seems tomorrow will be key in all areas
USO (US Oil Fund) Possible slingshot low. Needs to get back over 32.00 to confirm
OIH (Oil Services) After moving to the 200 DMA, had an inside day. Some big names report end of this week
TBT (Ultrashort Lehman 20+ Year Treasuries) Inside doji day. Subscribers: Long for a swing against the slingshot low 59.45
XOP (Oil and Gas Exploration) On the 200 DMA and trying to bounce with an inside day here as well
XHB (Homebuilders) Can you guess what type of day it was? Yes, an inside day.
UUP (Dollar Bull) Dropped to the 200 DMA today.
SGG (Sugar ETF) Subscribers: Sugar futures over 18.10 will bring an unconfirmed phase change to recovery-what I am waiting for
FXI (China) Subscribers: After holding the slingshot low, 34.86, will look to enter long if can clear the 10 DMA on the daily chart
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
Earnings Tomorrow: BAC
Category 1: (Aloha) Positive Phase, Condition 1, 2 days under the FTPs, Risk to Previous Day low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:
BBBY 64.95 now good risk with a move over R1 66.27 better to follow
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)
YELP Reports 4/29. Inside day with today's low max risk.
AIG Reports May 2nd. Inside day. Like to see 40.00 clear. Hold today's low
ACN Candidate for reversal or breakout. 76.20 closest risk with a move over 78.00 looking good
WYNN Inside day. 123.65 max risk, and over 128 looks good for more upside. Reports May 6.
BMRN Reports 4/25 Not a huge fan of buying new highs, but over 64.95 gets it to new highs-which it could do before earnings. Inside day so like today's low risk
AOL Reports May 6th. Inside day. Has to clear 39.26 and hold today's low
F Reports 4/24. Inside day over the 50 DMA with today's low max risk
P Inside day. Through 13.60 like with risk to today's low to trade it tight and under 50 DMA for a wider look
SODA Reports May 6. Has to clear 53.11 after an inside day. Max risk 50.90.
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:
STX Inside day off of the 50 DMA making that the max risk if can clear 35.86 level or R1. I see it reporting May 1.
Phase Change:
INTC Held the high of day after earnings. 21.50 a good level of support to trade against.
BEAM Reports May 2. Big move back to unconfirmed bullish phase. 61.80 now good support
JWN Reports May 16th. 55.50 area good one to hold and over 56.50 looks good
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
YUM Reports 4/23 Inside day. 67.00 should be a good wall of resistance with a break of 66.00 reason to think it'll see lower levels (above 67 could be good)
ICE Reports May 1st. Good one to go to if market is weak. Warning phase, 156.40 max risk
ANN Today's high good risk with some underlying support down at 24.50
Bye for Now!
