The morning was somewhat hair raising, as three of the four major indexes broke or threatened the low of last week. IWM and SPY broke the low but quickly recovered-closing higher. The Nasdaq (QQQ) held up the best. The Dow Jones Industrial Average (DIA) threatened last week’s low before following the suit of the other indexes and grinding higher. Of the indexes, GLD was the story of the day after it gapped higher and moved into an unconfirmed recovery phase. The China ETF (FXI) also performed very well today, gapping over recent highs. I will be focusing on stocks that are just changing phase and clearing moving averages.
S&P 500 (SPY) Broke last week’s low but closed above it. 168.19 is support. Subscribers: Pivots Negative
Russell 2000 (IWM) Beware of weakness under today’s low. Below 103, could see a test of the 7/11 gap at 101.94. Subscribers: Pivots positive
Dow (DIA) Inside day. Heldthe gap from 7/11. Subscribers: Pivots negative
Nasdaq (QQQ) Under pressure but holding up well. Today’s low must hold. Beware of weakness under 75.87. Subscribers: Pivots slightly negative.
ETFs:
XLF (Financials) Doji day. A test of the 50 DMA seems to be on the horizon, if today’s low is broken.
SMH (Semiconductors) Closed just shy of the 50 DMA, bringing this into a confirmed warning phase. Positive pivots.
XRT (Retail) Still under the 10 DMA. Bullish engulfing day and closed above the previously mentioned channel.
IYT (Transportation) Holding support at 114.96. Under this level can mean a test of the 50 DMA.
IBB (Biotechnology) 190 is an important area to hold.
IYR (Real Estate) Inside day under the downward sloping 10 DMA. Support on the 23 monthly moving average.
XHB (Homebuilders) Choppy sideways action. Holding support and under resistance.
GLDImpressive gap up this morning and proceeded to chop sideways. Unconfirmed recovery phase.
USO (US Oil Fund)37.85 is slight resistance.
OIH (Oil Services)Inside day. A break over yesterday’s range will move this over the 10 DMA.
TBT (Ultrashort Lehman 20+ Year Treasuries) Held yesterday’s lows and climbed higher, falling just short of the 10 DMA. The upward sloping 50 DMA is catching up to the price.
UUP (Dollar Bull) Gapped up, leaving an island bottom.
FXI (China) Subscribers: Gapped higher, clearing the recent highs.
SGG (Sugar) Subscribers: Starting to get sweet (pun intended). Approaching the top of the channel, that has been mentioned frequently in Mish’s videos.
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 eitherbuy 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)
GME Holding the 10 DMA. Today’s low must hold. Watch for a breakout or reversal.
CBG Confirmed a bullish phase. Watch for a breakout or reversal over the 50 DMA. 23.10 max risk.
NYT Recently over the 80 monthly. Watch for a breakout over 12.10 or a reversal against the 10 DMA.
WDC Watch for an ORR against the upward sloping 10 and 50 DMAs to control risk.
OI Recently over the 80 monthly. Watch for an OR reversal or breakout against the 10 DMA.
GMCR Inside day. Must clear today’s high and hold the low.
DISH Possible resistance at 46.00. Prefer ORR or breakout over 46.00.
Category 4: (Rip Tide) N/A
Other:
YELP Corrected to and holding the 10 DMA. Watch for a break out or reversal against the 10 DMA.
SGEN Corrected to and held the 10 DMA. Watch for a breakout or reversal. 41.45 max risk.
K Very compressed and holding the 10 DMA. 66.11 next resitance.
SYNA 42.79 is next resistance. Prefer an ORR against the 10 DMA or a breakout over resistance.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
EPD Beginning to separate from the 50 DMA and does not have good support until it drops to the 200 DMA. Watch for today’s low to break.
WETF Cannot clear the 50 DMA. Watch for today’s low to break.
Category 6: N/A
Best wishes for your trading,
Geoff & Matt
