The image that comes to mind after Thursday’s session is one from the 2009 Kentucky Derby when a small New Mexican horse named Mine that Bird, went off at 50:1 and won by fearlessly galloping along the rail.
The rotation of the sectors and groups in the market might be the most entertaining aspect as it has the savvy investor rooting for the underdogs only to find themselves holding a valuable ticket. The favorites of 2013 have little of their old smugness left.
Social Media for example. As an overall long term growth area-no doubt that impact remains. But, anyone who has heard us speak at our plethora of free webinars on phases (one tomorrow in fact), knows that in the cycle of nature, everything runs circular. The key is to know where any instrument is on the circle.
Here’s where I'd park money right now-Commodities, US dollar, Regional Banks, Food, China, Real Estate-odd combo, right?
Not really though-in the cycle of phases, China is bottoming. And we all need a place to live and something to eat.
S&P 500 (SPY) 4 days up and a small correction. Jobs report on Friday. Subscribers: Negative Pivots in all except DIA
Russell 2000 (IWM) 116.60 first point to hold, then the 50 DMA but over 118.50, some redemption
Dow (DIA) Not much of a digestion and actually, looks good
Nasdaq (QQQ) The leaders not so much. Tested and held the 50 DMA though
XLF (Financials) 22.40 pivotal
SMH (Semiconductors) That was the rest
IYT (Transportation) Held where it needed to
IBB (Biotechnology) Another example of the cycle at play
XRT (Retail) Watch for this to either clear the highs
IYR (Real Estate) 68.85 is the real place now to cross but very clear congestion at current levels
GLD 125.50 or 121-what will it see first?
USO (US Oil Fund) Unconfirmed accumulation phase. Friendly here overall
XLE (Energy) Our portfolio has hit two profit targets here
XOP (Oil and Gas Exploration) I was not shy in calling this one out too
TBT (Ultrashort Lehman 20+ Year Treasuries) This will surely have a response to the jobs report
PHO (Power Shares Water Resources) Looks poised
UUP (Dollar Bull) Changed phases and now a place to buy against is 21.50
KRE (Regional Banks) The strong, silent type
FXI (China Large Cap Fund) Subscribers: Very well could be forming a significant and long term bottom-which was part of my 2014 forecast
CORN (Corn) Subscribers: Inside day
SGG (Sugar) Subscribers: Watch your video on the weekly channel that has to clear once and for all
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) 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)
JPM R1 and today’s highs line up again only now with positive pivots and with risk good to today’s lows for a move to 64
SWC Volume was light so didn’t buy it, but now, has to clear 15.60 and long term friendly
TSLA Pivots positive with 222 support and a move over 228 looks good still
PSX New highs and now need to look more for an ORR with 83-84 reasonable target
LNC Has to hold today’s low and clear 52.09 to see 58.00
CVS Through 75.30 with risk to today’s low see more a miniswng trade catching some quick momentum
JNJ I’m not much of a new high buyer, but this has 2 inside days so can use a risk to today’s low for a miniswing with around 103 reasonable.
VMC Thin but a 2014 pick that cleared the 10 DMA. If holds today’s lows, could see move to 70 or higher
Category 4: (Rip Tide) N/A
Phase Change:
ICE Possible reversal off the lows and phase change over the 200 DMA. 200 is a good tight stop if good can go to 208 then 220
STT Like when an instrument tests the 200 DMA and holds. Great risk and a real contender over R1 for a long term move higher
AXL Still looks good if you have the patience
ALGN Inside day and looks like its up in the aftermarket. Therefore, big eyes here tomorrow over the 50 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IACI 72.32 now resistance with a break of 71 reason to think this will go down to 68.00
MNST Might wait for an ORR but under 68 looks weak to 65.00 next
EL Under S1 like it with risk to today’s high
Category 6: White Cap-N/A
Bye For Now!
