We began the week waiting for a significant reversal of current trend. Although intraday that seemed likely, the resolve of the market returned leaving everything as it was the end of last week.
If it weren’t for the small caps, one might actually see today’s action as positive. After all, SPY and DIA held the 50 DMA and the bull phases. NASDAQ tested but closed above the fast moving average.
For our part, we will continue to 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.
It certainly seems that interest rates had a peak low last Friday-that will be one more factor in a sea of indecisive factors currently spooking any new investors from entering the market.
Personally, I enjoy these times as when the market is “easy” the barrier to entry as a so-called stock expert is nil. Now, the amateurs are quiet leaving the pros to navigate and stay one step ahead.
For Tuesday-the classic turn-around day, if NASDAQ holds the 86 level and SPY DIA hold the 50 DMA, expect IWM to play catch up.
S&P 500 (SPY) 186.50 pivotal, over 188 much better. Subscribers: Negative pivots in QQQ and IWM, neutral in SPY and positive in DIA-how’s that for diversion?
Russell 2000 (IWM) Tested and held the 200 DMA. 112.50 a line in the sand to cross.
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) Like when an instrument respects a major line in the sand-with a lack of confidence by many, these technical lines in the sand help restore some of that lost confidence.
Nasdaq (QQQ) 86.35 the fast moving average. Over 87.35 or so, much better
XLF (Financials) The Bank of America news hurt this group. 21.94 is the 50 DMA if this has a chance of recovering
SMH (Semiconductors) Confirmed the warning phase. Since tech stocks live here, a move 45.00 is a really good sign the worst is over
IYT (Transportation) Still holding the 50 DMA as a sign of strength
IBB (Biotechnology) Held the 200 DMA which will only be impressive if it can clear 228.80
XRT (Retail) For an instrument that failed the 200 DMA, this hasn’t strayed too far from it. 83.34 the number
IYR (Real Estate) New 2014 highs with the last swing high in 2013 69.60
XHB (Homebuilders) Not pretty here unless it roars above 31.50
GLD No feel here at all
USO (US Oil Fund) Holding the 50 DMA with a good bounce off it
TBT (Ultrashort Lehman 20+ Year Treasuries) Subscribers: Like the confirmation of Friday’s low as a possible reversal-65.40 is next pivotal number to clear and it should now hold today’s low
EEM (Emerging Markets) 41.00 good are to uphold now
IFN (India Fund Inc.) Subscribers: 22.00 becoming a better support area to keep watching with a new move over 22.20 encouraging
EWP (Spain) Subscribers: Over 41.47 like this with the 50 DMA max risk
CORN (Corn) Subscribers: Over 35.00 looks good
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:
GT Reported. If clears R1 looks good and the risk is to today’s low
PLD reported already-like it over today’s high and R1 with risk to 40.75
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:
WFC I like that today’s high and R1 line up with a risk to 48.50 for a swing
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)
HUN Reports before the open. Like over todays highs with a tight risk to the 50 DMA
OXY Reports May 5th A flag forming which will break out if clears and closes above 97.00. Like to see this hold today’s low
WAG Sideways and holding. Like over 68.31 now
YUM Over 77.95 looks better if you subtract the candle from the earnings report. Risk is 76.65
Category 4: (Rip Tide) N/A
Phase Change:
DDD Reports before the open-after a slingshot low, a move over 50.50 would be good to follow especially since it is holding a major monthly average
GOOG Very interesting possible slingshot low on the 200 DMA-which confirms over R1 522.95
AMGN Possible slingshot low if confirms over R1 at 113.13 which is shy of the 200 DMA; held the 65 weekly moving average
PM Has to open over the 200 DMA and have a quick stop under if that doesn’t work out
SODA if holds 45.00, the base is confirming with 50.00 a reasonable target ahead of earning May 28th.
Shorts:
Category 5: N/A
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
DG If fails S1 55.75, can risk to 56.90 or so for a try at a swing short looking for 55 then 53.00
Bye For Now!
