Although great to see some follow through after the outstanding conclusion of last week considering the week began looking like an abyss, not much happened according to current phases in the indices.
So, here’s the rub-is this a triple bottom in the small caps (February, May and now August lows in succession OR, a huge double top (March and July highs) with rallies running out of gas?
We might just have to stay tuned while trading in the July range for the remainder of August to find out. Besides geopolitical turmoil, domestic focus will turn to politics with the mid-term elections coming up. Weary traders will begin to turn towards summer vacation until after Labor Day. Of course, we never rule out any possible scenario, but range bound right now, seems the logical assumption.
Bright spots right now: Gold miners, Retail, Biotechnology and Solars, if hold the 200 DMA. Needs some serious steroids: Financials and Semiconductors. China doing very well. Regional Banks will take some time. Interest rates remain wonky as in, they are very low therefore, showing a lack of basic trust in the intermediate future.
S&P 500 (SPY) Today’s gap low is important to hold if this is to have a chance at the 50 DMA and a positive phase change Subscribers: Positive Pivots in all
Russell 2000 (IWM) Could not close above the 200 DMA-like SPY if has a chance needs to hold todays gap low
Dow (DIA) Confirmed the reversal pattern making this a really good place to look for strength
Nasdaq (QQQ) Best one to follow if things continue to improve-especially if holds todays low
XLF (Financials) 22.36 a good spot to hold or some issues
KRE (Regional Banks) Look here and you wonder where the bulls are?
SMH (Semiconductors) This really has to take some leadership and clear the 50 DMA
IYT (Transportation) Similar to SMH
IBB (Biotechnology) At least this cleared the 50 DMA, now trick is can it hold?
XRT (Retail) This cleared the 50 DMA, now trick is can it hold?
IYR (Real Estate) Confirmed bullish phase
GLD Low rates and warring nations-this is not a great move up, but enough to not let it go down either
Metals and Mining (XME) New 2014 highs-after clearing 43.00
USO (US Oil Fund) Unconfirmed Warning phase-dancing on the 200 DMA-keep watching
XOP (Oil and Gas Exploration) 75.50 now key to hold
FCG (First Trust ISE Reserve NatGas) Subscribers: Did not confirm the slingshot
TAN (Guggenheim Solar Energy) Subscribers: Wedged between the 200 and 50 DMA
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs –Possible top? Said that before, but one day it will be true
IFN (India Fund Inc.) Subscribers: Confirmed the slingshot
EWP (Spain) Subscribers: Did not confirm the slingshot
EWW (Mexico) Subscribers: Big move
FXI (China Large Cap Fund) Subscribers: Back on track for new highs and around 43 target
CORN (Corn) Subscribers: Inside day
JO (Coffee) Subscribers: Looks better over the 10 DMA
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 caneither 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)
CTB Never really went anywhere but still worth watching especially for an opening range reversal
*KMX Never really went anywhere but still worth watching especially for an opening range reversal
*PANW If holds 80.75 then has potential to keep going- a Nugget
*FB Really like to see if todays highs can 74 clear once and for all
Category 4: (Rip Tide) N/A
Phase Change:
EL Reports August 15th before open Cleared the 50 DMA and if stays there a miniswing trade
FWLT Confirmed slingshot against the 200 DMA which now is a great risk
WMT Reports August 13th We have a teeny piece which we only have a couple of days left to see out
LGF Inside day and more of a day to mini here for risk if holds
*EHTH Ran right to resistance but not ready to dismiss this yet
*LULU Unconfirmed move over the 50 DMA so like this if holds tomorrow
MRVL Possible slingshot low if confirms over today’s high and the 10 DMA 13.20 risk to 12.73
DDD Might be bottoming if holds 47.90 and can clear 50.00
Shorts:
Category 5: Titanic-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 low
ALGN 54.46-54.51 is the 50 DMA resistance. Under 53.67 looks lower to 51.00 next support
QCOR Closed under the 50 DMA which means has to stay below and take out S1 91.21
