If there was ever a week I was happy to see end, it was last week. Not because we lost money-or had it wrong-en contraire. We were well ahead of the curve-don’t chase rallies or dumps-stay patient and wait for a significant reversal of current trend.
S&P 500 held the 50 DMA and the bull phase as did the Dow. Sure, the selloff happened in one day afterclimbing for 6 days, going sideways for 2 days. Sure, the small caps and NASDAQ look a lot worse(IWM) super close now to the 200 DMA.
NASDAQ held a fast moving average and 86.00-a target after failing to approach the 50 DMA.
What does this all mean? Clearly, you have read that certain instruments are safe-utilities, household goods, etc. Perhaps. But if the market goes through a major liquidation, very little remains safe.
For our part, we will look for SPY and DIA to fail the 50 DMA or not. We will look to short there as opposed to the big momentum stocks that have been hit hard already. And, we will continue to trade the soft commodities, which have presented profitable opportunities all year.
One more note-interest rates-possible Friday was a peak low for rates-possible. We will be watching.
S&P 500 (SPY) 185.77 up 185.92 is the final frontier of support Subscribers: Negative Pivots in all
Russell 2000 (IWM) 110.38 is the 200 DMA with a move over 112.50 possible that was it for now. Sometimes it’s more of a wide range that establishes as opposed to a major move one way or another. This one is either or-a huge topping pattern that measures down to 100 or a drop to support that bounces around going nowhere in particular.
Dow (DIA) 50 DMA 162.80
Nasdaq (QQQ) Held 86 for now, If gaps below not good, if holds then back to the trading range theory
XLF (Financials) Didn’t hold the 50 DMA but did hold the fast moving average. Range to watch for a break under 21.75 or over 21.95
SMH (Semiconductors) Warning phase first time since February
IYT (Transportation) Looks like a top for now-with the 50 DMA below
IBB (Biotechnology) Subscribers: This had a slingshot low just like IWM and is now near the 200 DMA, just like IWM. Question will be-does the slingshot low hold up or if violated, how much more damage in store?
XRT (Retail) So much for the 200 DMA
IYR (Real Estate) Winner for best looking in the aforementioned groups. Keep eyes here
GLD Even with the strong up day on Friday-it still has not cleared back over the 200 DMA
OIH (Oil Services) Amazing sideways action near the highs
XLE (Energy) Not as pretty as OIH but holding
XOP (Oil and Gas Exploration) Not as pretty as XLE or OIH-toppy looking
TBT (Ultrashort Lehman 20+ Year Treasuries) Subscribers: Possible good-looking slingshot low-will this be the one? We need confirmation
IFN (India Fund Inc.) Subscribers: Inside day
EWP (Spain) Subscribers: Upgraded on Friday. Held the 10 DMA-like over Friday’s highs with risk to Friday’s low
FXI (China Large Cap Fund) Strong finish on Friday which makes this at least worth watching on Monday
TAN (Guggenheim Solar Energy) Subscribers: Closed above the 200 weekly moving average-also interesting
CORN (Corn) Subscribers: Over 35.00 looks good
BAL (Cotton) Subscribers: Will be watching this one too
FCG (First Trust ISE Reserve NatGas) Subscribers: Slingshot high
SGG (Sugar) Subscribers: Inside day under the 50 DMA-over 57.14 compelling
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:
OXY Reports May 5th Even more interesting with an inside day over the 10 DMA as risk
WAG Held where it needed to so now need to see a move over Friday high and R1 with max risk Friday low
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)
YUM Over 77.95 looks better if you subtract the candle from the earnings report. Risk is 76.32
AWK Inside day. Reports May 7th. Over recent highs 46.28 could take it to 47 and beyond ahead of earnings
K Reports May 1st. Miniswing material for a move over recent highs 66.77 and risk to Friday’s low
XOM Reports May 1st-again a Miniswng at most with the risk under 100 and a move over 101 good for possible run to 102.40 and beyond
TFM Inside day held up well. Over 36.48 should bring it up with 35.25 risk max and could use S1 as well
Category 4: (Rip Tide) N/A
Phase Change:
CI Reports May 1st which gives us 4 days for a miniswing. It had a doji day right on the 40 DMA and looks poised to take out the 200 DMA
PM 83.75 now support to hold-like this for move to and over the 200 DMA at 85.00
MPW Reports May 8th Still has to clear 13.40 but looks good with Friday’s doji day-max risk Friday low
Shorts: If you read my intro, the indices are where we need to look for best short opportunities especially SPY DIA if they fail
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
DISH Reports May 8th. Now has to break S1 and recent lows to see a move down to the 200 DMA
Bye For Now!
