The main story today is that all of the indexes, with the exception of the Dow, closed at or above the 4/15 highs that were mentioned yesterday. The S & P 500 and the Russell 2000 closed decisively above the highs, while Nasdaq closed exactly at that level. Recent highs are the next hurdles. There are three possibilities for the market tomorrow, and at this point, nothing would surprise me. 1): A push to new highs given the multitude of positive earnings after a highly profitable week and the clearance (in most indexes) of the 4/15 highs. 2) An inside day with digestion or should we say exhaustion by many active traders as the volatile week concludes. 3) A gap lower with weak longs exiting and top seekers shorting (unlikely it seems, but you just never know). Semiconductors (SMH) and Retail (XRT) had firm days, while Transportation (IYT) lagged behind the rest of the market, but maybe not for long.
S&P 500 (SPY) Accumulation day in volume today but we still need to clear the 2013 high at 159.71. I would like to see the week close with Thursday's low defended. Subscribers: Pivots positive in all indexes
Russell 2000 (IWM) Cleared the high from 4/15. As long as the 50 DMA holds, looks poised to take out the 2013 highs.
Dow (DIA) Lagging mainly due to the poor earnings in IBM. Has some serious work to do to get over the 4/15 highs.
NASDAQ 100 (QQQ) After an inside day, nice gap open over the 4/15 high. If today's low is defended, even with more digestion tomorrow, will look good going into next week.
ETFs:
GLD Gapped up and climbed over the 200 weekly moving average with the possibility of leaving an island bottom in its wake.
XLF (Financials) New 2013 highs!
IBB (Biotechnology) Inside day, which means it needs to clear Thursday's high to gain traction. Holding the 10 DMA.
SMH (Semiconductors) Another new 2-year high close-guess who is even happier than yesterday?
XRT (Retail) Cleared72.79, its 4/15 high, and went on to make new highs. One of the best performing sectors.
IYT (Transportation) Closed right at the 4/15 high. Subscribers: 108.84, the 4/15 high is pivotal. The market may be giving us a gift, because this has not moved with the rest of the market.
IYR (Real Estate) Two doji days in a row, which means paused and ready to move one way or another. Testing the 2013 high. Subscribers: Negative pivots (one of the few)
USO (US Oil Fund) As illustrated this week, it had a big move today after the basing action. Ran up to, but not over the 50 DMA. Subscribers: Could see this roll back over, as this did not clear the 50 DMA.
OIH (Oil Services) Ran to the 50 DMA, but it could not clear. Subscribers: Another place to look for potential shorts.
XLE (Energy) The 50 DMA remains resistance.
TBT (Ultrashort Lehman 20+ Year Treasuries) Holding 59.50 support. Ideally, this needs to clear 61.00. Subscribers: With positive pivots, still like this on strength (provided it holds 60.00)
XOP (Oil and Gas Exploration) Could not clear the 50 DMA. Subscribers: Entry tweeted at 56.70. If bought, would keep a no-loss stop.
XHB (Homebuilders) Cleared 30.00. 30.66 is the 2013 high.
UUP (Dollar Bull) Still needs to clear the 200 weekly moving average.
FXI (China) Subscribers: Cleared the 200 DMA, making this an unconfirmed warning phase. Now wedged between the 50 and 200 DMA.
RSX (Russia) Subscribers: Holding the balance of the position. If can get above 26.50, it will be an add with 26.00 the new support to hold
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
**NOTE: Picks drop off the list when they start to get overbought. However, there are many that triggered entries and have outperformed the market, such as: TIF, QIHU, SODA, JWN, ROST. If risk is controllable, we could still see more upside in all of these picks.
Category 1: (Aloha) N/A 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)
NSC Inside day. 50 DMA needs to hold at 74.45. And needs to clear 76.25. Weekly and monthly charts look positive.
AMP Needs to hold 72.50. Once it clears 74.53, it should go on to new highs.
TRIP Reports May 7th Has to clear 54.14, the slingshot high. Provided it holds 52.00 area, looks like it should clear the slingshot before earnings.
CREE Inside day. Tight risk is today's low. Bigger risk is the 10 DMA. If it can get through 58.00, possible we can see 60.00 or higher.
NTAP Reports May 22nd Provided it holds 34.15, still has a shot for a run to the highs and beyond. Like reversal or breakout if risk is in line.
AOL Reports May 8th. Opening Range Reversal now preferred
SODA Reports May 6 Opening Range Reversal now preferred
KBH 22.50 now an area to clear, with long term trend still intact and the possibility of seeing 30.00.
IR Confirmed the bullish phase provided 54.15 holds. Next hurdle is 56.00.
Category 4: (Rip Tide) N/A
Phase Change:
AAPL Had slingshot low before earnings. Moved up from there and closed today with an inside day over 10 DMA. Provided it holds 408.00, like over 415.25.
FDX Has to clear R1 and today's high. Use 200 DMA as risk.
IBM Still in play provided it holds today's low and clears 196.50.
OI Setting up for a possible position trade after an inside day. Has to hold 25.00 max risk and clear R1 (25.76), and ultimately 26.00 which will also clear the 50 DMA. (A Mish fave. Keep your eyes on this one!)
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ARUN Reports May 16th Provided it doesn't clear today's high. If it breaks 22.00, expect a move down to 20.50.
BAX Big move down so watch for an OR failure against today's high. Recent low is 68.58, which has to break.
CRM Reports May 16th 41.31 max risk and needs to break S1 at 40.54.
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
FCX Provided it doesn't take out today's high. Looks heavy under S1.
Bye for Now!
