Rarely do I focus on the actual price of the Dow, but I have had so much fun lately with the reference to the Simpsons’ episode “Terror at 5 ½ Feet” and Terror at 18,000 in the Dow, I decided to pay more attention.
To review, the terror (or gremlin) for the Dow was seeing a Fed Interest Ratehike hanging on the side of the school bus or not and what that would entail for the market.
So far this week, the Long 20-Year Treasury Bond ETF has declined fairly significantly, entering into an unconfirmed Warning Phase as of Wednesday. Yet, the Dow closed back over 18,000 seemingly getting used to the idea that a rate hike is not only likely, but feasible and most likely prudent.
As to the question I asked myself Monday night re: how can you tell folks to belong gold at the same time you are telling them that you believe the Federal Reserve will begin to nominally raise rates? I answered myself, not a bad self-query.
On Tuesday we saw a rise in both interest rates and gold. Wednesday, though gold took a hit, it remains well within its recent trading range parameters, albeit closer to the lows of that range.
Given I have seen our Economic Modern Family consistently hold one another up, taking turns on which member leads and which one lags, Wednesday, Semiconductorshad the largest percentage gain. But Transportation was the most impressive, moving further away from the 200 DMA and now, heading back towards the 50 DMA.
The emerging megatrends, such as cyber security, solar energy, and the expanding debate on legalizing medical and eventually recreational marijuana, continue to capture our attention and trading capital. Also add 3-D printing to that group.
The Dow hit 18,000 for the first time on December 23, 2014. A photograph of Peter Tuchman, a member of the NYSE for over 30 years, wearing a DOW18,000 hat went virile. As I dug further into Mr. Tuchman who is called, “The Most Photographed Trader in the World”, I found an article where he defended himself against allocations that referred to him as a relic, after all, most humans on the trading floor have been replaced with electronics. He called himself a survivor.
I’m certain he kept that hat!
S&P 500 (SPY) It hasn’t traded over 211.27 since March3rd, so that should be a strong place to clear. Support now, at Wednesday’s low Subscribers: Positive Pivots SPY QQQ Negative DIA IWM
Russell 2000 (IWM) Over 126.25 better and support down below at the 50 DMA before we say game changer
Dow (DIA) Unconfirmed Phase Change Back to BULLISH 181.67 a huge point to clear with 178 key support to hold
Nasdaq (QQQ) With some big names reporting soon, at this point, it looks poised for higher provided it holds 105
XLF (Financials) Choppy but holding around 24.00
KRE (Regional Banks) Next close over 41.74 excellent. Support down to the 50 DMA at 40.70
SMH (Semiconductors) Confirmed bullish phase. 56.00 now key support
IYT (Transportation) 160 resistance, 158 pivotal and 156 major support
IBB (Biotechnology) In the spirit of the Economic Modern Family, big bro did his job and kicked up his feed on Wednesday
XRT (Retail) 102.50 place to clear for a new leg up but has to hold 97.00 on the downside
IYR (Real Estate) Inside day.
ITB (US Home Construction) Staying away from this for now since in an unconfirmed warning phase
GLD (Gold Trust) Unconfirmed bearish phase. 113.40 should hold if this is going to hold up-then its 110. Over 116.25 new ballgame
USO (US Oil Fund) Corrected to a decent support level so assuming setting up for a new long. Over Wednesday’s high good.
OIH (Oil Services) Inside day
XLE (Energy) After the basing action, has follow through with the 200 DMA above looking like its calling its name-and an inside day
TAN (Guggenheim Solar Energy) May never get a correction again!
TBT (Ultrashort Lehman 20+ Year Treasuries) Over the 50 DMA with 44.00 the next place to clear
UUP (Dollar Bull) Held the 50 DMA at 25.57
EWW (Mexico) Watching this to get back over 60.00
DBC (DB Commodity Index) Subscribers: Inside day. Over 17.84 like for a swing risk to 17.60
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 positive tone for short-term trades and 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)
*RAI Over 76.00 this is worth holding onto for move to maybe 84-85.00 but thinking more miniswing if the risk sets up
PNRA Risk to 180 and consolidating after huge gap higher. Can see 190 before earnings 4/28
KSS Reports May 14th Over 76.35 still good with risk far to the 50 DMA so looking at a miniswing
JPM After reporting been correcting. Now, like it if holds 61.05 the 50 DMA with a move over 63.37 R1 good for a swing
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:
Phase Change:
BKD Inside day. As a 2015 pick it has corrected and we can use the 100 DMA or 36.49 as risk if this clears R1 for a miniswing since Reports May 6th.
SINA Reports May 24th Today’s low good point to trade against if sets up on a breakout or ORR
EMC Unconfirmed recovery phase. Risk to today’s low and like a lot now for a longer term trade
CMC Reports June 25th Rallied over our point at the end of the day. Over 16.09 gets it over the 200 DMA and clearly still a good trade there with risk now to the low of the day it clears the 200 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
UA ORR against 84.57 only
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 low
DISH Reports May 7th Under S1 only now with risk to 70.28
Best Best wishes for your trading,
Michele Schneider
