Could it be that there really was “Terror at 18,000 in the Dow?”
Okay, so maybe the word “terror” is a bit of a hyperbole; but, we saw that level scraped on Monday followed by a substantial retreat from it on Tuesday. The mediocre news is that the Russell 2000s is in a confirmed bullish phase. IWM also had an inside day (when the range is within the range of the prior trading day.)
So what’s the scary news? Besides everything else? The Dow, NASDAQ and the S&P 500 ended the session breaking the 50 DMA going back to unconfirmed warning phases-or what has been in 2015, a ping-pong match between the bullish and warning phases with the 50 DMA the net.
Checking in with the Economic Modern Family, IWM had the inside day, retail (XRT) made new highs and then retreated with the market, regional banks (KRE) also had an inside day (impressive), transportation (IYT) fell but not too badly (actually outperformed), semiconductors (SMH) had an inside day though returned to an unconfirmed warning phase) and biotechnology (IBB) did its job, which is to not fall completely apart.
Since I have been referencing sheep and shepherds all year thus far, the number of Bible quotes that come up when I google either word is palpable. Therefore, I think it’s safe to say, “The Market Giveth and the Market Taketh Away.”
And all of a sudden, I’m reminded of an oldie but goodie, “The Weight” by The Band.
“I pulled into Nazareth, was feelin' about half past dead
I just need some place where I can lay my head.
Hey, mister, can you tell me where a man might find a bed?
He just grinned and shook my hand, "no" was all he said.”
Welcome to the market’s giant sheep pasture, where we graze, scatter, poop and return hungry.
S&P 500 (SPY) Failed 208, so now back to looking at 204. Subscribers: Negative Positive in all
Russell 2000 (IWM) 123.70 support and over 125 should help the rest of the market
Dow (DIA) Not only broke the 50 DMA but landed smack on the 100 DMA. 177 support and 178.50 resistance to clear
Nasdaq (QQQ) 104.50 major support with 107 major resistance
XLF (Financials) Return to an unconfirmed Warning Phase, cha cha cha
KRE (Regional Banks) Inside day which keeps me friendly to this group
SMH (Semiconductors) Inside day but under the 50 DMA.
IYT (Transportation) 155.28 the place to hold
IBB (Biotechnology) 353 Resistance and 335 major support
XRT (Retail) Maybe a reversal candle, but premature to call that just yet
IYR (Real Estate) Lagging due to interest rate concerns-over 80.00 could have a bounce and under 78.60 see more downside
ITB (US Home Construction) Great performance but fell a bit from the new highs with the market and another possible reversal candle
GLD (Gold Trust) 115 now resistance and is hugging the 10 DMA
XLE (Energy) Looking for a close above 78.00
XOP (Oil and Gas Exploration) Like this over 50.00 if sticks
TAN (Guggenheim Solar Energy) Looking for a new buy
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs should be quiet til next week after the jobs report
UUP (Dollar Bull) Good comeback since it held 25.50 level
EEM (Emerging Markets) confirmed Recovery Phase and still basing
RSX (Russia) Like to see it hold around 17.00
BAL (Cotton) Basing maybe
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 (What Keith covered during the March 25th Live Coaching). It says Short-term Negative 3, Intermediate-Term zero, and Long-Term Positive 4, aggregate makes it a neutral but with negative pivots indicates a bullish bias only comes with a move over R1. Otherwise, short setups under pivots valid.
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)
SWI 50.50 good risk for more of a day to miniswing
JPM Has negative pivots so has to clear R1 then I like it with a risk to 60.00
VLO Like if holds 62.50 and could see new highs over R1, which corresponds with today’s high
Category 4: N/A
Phase Change:
PSX Inside day. Over 80 looks good with risk to 78.00
PCAR Inside day. Has to clear 63.60 and hold 63.00
PNRA Over R1 like it for a miniswing trade only with risk to 160
TEX 26.55 pivotal after an inside day. Like over R1 for a mini maybe swing
BAX Inside day and trying to hold up. Like to see it clear 69.00 now
YOKU Possible Glass bottom with big volume-like over R1
Shorts: Focus List: NFLX HOG EBAY
Category 5: N/A
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
