A constructive session given some more bad economic data and North Korea in the headlines. Friday's job report, I will venture to speculate, is already factored in for worse rather than unchanged or better. Therefore, the surprise could be on the upside if today's technical signals follow through. The Dow had an inside day making a brick wall high possibility more suspect, especially since it held the fast moving average. The Russell 2000 peeked its head over the 50 DMA which is exactly the scenario I wrote about last night: "Sometimes, when instruments get a return move through the 50 DMA, it offers a good low risk long entry." With some confirmation (a hold of the 50 DMA), anything can still happen as the S&P 500 and NASDAQ remain in bullish phases very close to the all-time highs. One caveat-bonds. As signs of a "flight to quality" remain, full blown, buy, buy, buy sentiment also remains at bay.
S&P 500 (SPY) Inside day. No real damage done at this point. Subs: Neutral pivots
Russell 2000 (IWM) Inside day. Unconfirmed Bull phase-if the 50 holds, everyone back in the pool! Subs: Pivots still slightly negative
Dow (DIA) Inside day. Held the fast moving average. Subs: Pivots Positive
NASDAQ 100 (QQQ) Only one that did not have an inside day. Got closer to the 50 DMA before bouncing just shy of the fast moving average. Subs: Pivots negative and today's and R1 line up over the 10 DMA
ETFs:
GLD Closed over 150 for now. Possible slingshot low only if today's low holds.
XLF (Financials) Inside day on the 50 DMA. A definite follow the range break setup
IBB (Biotechnology) Did not confirm the brick wall high and had an inside day.
SMH (Semiconductors) Held 34.00 after testing 33.92, which was the low on January 17th, the day it gapped higher. Still in warning phase. Subs: I bought a small starter position and will add over R1 34.44
XRT (Retail) After today's rally, thinking those double tops at 70.81 will be history. Subs: Pivots Positive
IYT (Transportation) Confirmed warning phase, but right under the 50 DMA.
IYR (Real Estate) "Probably the first place to look if the sharks swim away." How true that turned out to be! New highs!!!
USO (US Oil Fund) From an unconfirmed warning phase to an unconfirmed distribution phase.
OIH (Oil Services) Like SMH, held the support from the mid-January gap higher.
XLE (Energy) Under the 50 DMA substantially so needs some work now before a new direction up or down
TBT (Ultrashort Lehman 20+ Year Treasuries) The party pooper. Until it clears the 200 DMA
XOP (Oil and Gas Exploration) Doji and want to see if it can clear 58.00
XHB (Homebuilders) Subs: Inside day
UUP (Dollar Bull) Golden Cross and a nasty looking red candle.
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:
MUR Holding the gap from 3/26. And, R1 and today's high line up.
TIF Inside day. Risk 70.19 and over R1 today's high line up
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)
WY Inside day and back over the 50 and 10 DMA. Would only do a low risk entry-either against a pivot or a reversal
UPS Inside day. Did a starter position to see if it holds the 50 DMA-risk is under and if does, will add over today's high and R1 for swing
YELP Cleared the 10 DMA. Now, if holds here, looks good for new highs
CREE Big move but also an inside day. As long as the 50 DMA holds, still like this longer term
TROW Inside day and right on the 50 DMA under the 10 DMA. Like over today's high if the 50 DMA holds
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:
QCOM Held the 50 DMA and with some news about them and Facebook, like the way R1, today's high and the 10 DMA all line up
TEL Looks like it's being pushed down reluctantly. 41.25 is the wall of support to hold and if clears 41.50 good low risk entry. Then has to clear 42.00 for a better shot at a swing trade
Phase Change: MBI 2 inside days. The calm before the storm? COH Needs to clear 51.00 to get going and hold 50. CRUS Glass bottom if can hold 20.00 and after a big move, perhaps wait for a reversal. LTD Inside day and holding the 50 DMA. Today's low max risk ALXN 2 inside days right under the 200 DMA. Over today's high like with risk under today's low ROST Another one that looks ripe to move to and beyond the 200 DMA. 59.50 good risk
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
EW Went home short on the OR breakdown. Now, has to break the 10 DMA under today's low, to see move to 80.00
GOOG 797.50 good risk as this goes into an unconfirmed warning phase. Could drop to 760.00
Bye for Now!
