The good news is that the S&P 500 negated the recent topping action and closed above the last swing high 187.17. The not quite bad news-let’s call it more sobering news-is that the small caps or Russell 2000scouldn’t quite make it back up to the 50 DMA (nor could NASDAQ) leaving the not so dynamic duo in warning phases.
As much as I appreciate the rally over the last 5 days, and I do, red flags loom. One big one is the interest rates-like to see the rally accompany firming rates rather than the artificially low ones the Fed hath created.
2014 or The Year of the Horse-has been one more of a hybrid-a mule! Stubborn, beast of burden, carrying a load up hill then falling down at the crests-not as sure footed as a purebred.
With lots of earnings still ahead of us, and an incredulous bunch of investors mainly due to the constant rotation of instruments that gain strength then fall to exhibit weakness, we continue to play it relatively safe. Oh, yes, and we still love soft commodities.
S&P 500 (SPY) 187.15 is now support to hold with the April highs 189.70 Subscribers: Positive Pivots in all
Russell 2000 (IWM) 115.84 the overhead 50 DMA with 113.50 area to defend now
Dow (DIA) April high 166.06 and now, 164.30 area to defend
Nasdaq (QQQ) 88.58 the 50 DMA overhead and could not even clear 87.88 the April 10th high-if market rolls over look here
XLF (Financials) Unconfirmed bullish phase if it holds above 21.90
SMH (Semiconductors) That high to clear from 4/10 is 46.03 with the 10 DMA at 44.96 the support
IYT (Transportation) Exactly what I thought-jetted to new highs-one really good sign
IBB (Biotechnology) 234.57 key to clear of this move was no more than a run to resistance
XRT (Retail) Touched the 200 DMA-question is can it clear it?
IYR (Real Estate) March high 69.33
GLD Right on the month moving average which means has to hold or could be in bigger trouble
USO (US Oil Fund) Just like that, new highs then dump
TBT (Ultrashort Lehman 20+ Year Treasuries) If TLT clears 110.67 the bulls will come back. For now, I am waiting for the shoe to drop
PHO (Power Shares Water Resources) Couldn’t quite clear the 50 DMA
EEM (Emerging Markets) Subscribers: A weekly close over 42.26 will be an interesting breakout
TAN (Guggenheim Solar Energy) Subscribers: ORR makes this the only way to trade this now-especially if can use 42.50 risk-the intraday support
CORN (Corn) Subscribers: Has to clear the 10 DMA at today’s high
BAL (Cotton) Subscribers: Another one to watch for a weekly breakout over the 200 week moving average
SGG (Sugar) Subscribers: A confirm over 56.00 could be a low risk trade with stop under last week’s low
JO (Coffee) Subscribers: The 200 weekly moving average coming up
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
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:
CNQ Reports May 9th. Has to hold today’s low and clear R1 at 40.57-good looking daily and monthly charts
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)
DVA 2 inside days andmore miniswing as far as risk since reports May 1st. Inside day and risk now is 68.70 area
XRX Reported and had a bullish engulfing pattern. Now, 11.40 is pivotal as the 10 DMA and over 11.61 on a closing basis good sign
HSP We have to exit 4/29 since reports 4/30 before open. Now, like to see it clear 44.18 and hold the 40 Day 43.08
YUM aftermarket shows big gap up-so let’s keep eyes on it over 77.91-on a reversal since could see a move to 88 over time
Category 4: (Rip Tide) N/A
Phase Change:
TEX Unconfirmed phase change to bullish-Reports April 30th so more Miniswng
MBI Brick wall bottom-Reports May 12th-if holds the 200 DMA 12.30 like to perhaps 13.45 area
EJ Doesn’t report til June. Brick wall bottom and now over the 200 DMA. Like the risk to today’s low and a move over 11.03
SCTY ORR only now
MPW Reports May 8th Like that it held the 10 DMA and the moving averages are about to go into a golden cross. Has to really clear 13.40 once and for all
SODA Reports 5/28. Keeping it here because it held the 10 DMA now the risk at 39.66
DDD Reports April 29th but for a miniswing with an ORR the better choice
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MON Broke the 50 DMA and if holds below 112.10 could see drop to 109.50 or lower
DISH Reports May 8th. If breaks the 10 DMA 59.02 then could see another drop to around55.00
Category 6: White Cap-Having a 2-3 Day correction over the pivots.. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s lows
WFM Reports May 6th Under today’s low lines up with S1 and could see more downside ahead of reporting
Bye For Now!
