Today was a very volatile day, due to the release of the FED meeting minutes and the uncertainty regarding the indexes. The four major indexes are currently in very vulnerable positions. Tomorrow, I will closely watch the Russell 2000 (IWM) to see if it can hold the 50 DMA. IWMconfirmed a bullish phase today, and looks the best out of the four major indexes. The S&P 500 (SPY) is in a particularly precarious position, as it closed under recent lows and is far from solid support. Nasdaq (QQQ) is consolidating and should hold the recent lows if it is going to resume its accent. The Dow Jones Industrial Average (DIA) continues to drag downward but may find support at the July low and is now oversold. The FED minutes offered no big surprises as regards to policy change but, it was enough to shake up the market and sent TBT to new yearly highs.
S&P 500 (SPY) Broke down out of the range from the inside day and closed under recent lows. Watch for 163.58 to hold. Subscribers: Pivots negative.
Russell 2000 (IWM) Confirmed the bullish phase and closed above the 50 DMA and the low of the gap from 8/21. Subscribers: Pivots negative.
Dow (DIA) Continuing to drag downward. Watch for 148.25 to hold. Subscribers: Pivots negative.
Nasdaq (QQQ) Broke down out of its inside day but, held recent lows. Watch for 75.30 to hold.Subscribers: Pivots positive.
ETFs:
XLF (Financials) Watch for recent lows to hold.
SMH (Semiconductors) Broke under the range of the inside day and closed under recent consolidation. Very vulnerable.
XRT (Retail) Unconfirmed warning phase. Watch for 78.90 to hold.
IYT (Transportation) Inside day. Closed under the 50 DMA. Now in an unconfirmed warning phase.
IBB (Biotechnology) Holding the upward sloping 50 DMA and rising. Watch to see if the 10 DMA is cleared.
IYR (Real Estate) Positive pivots. Watch for today’s low to hold.
XHB (Homebuilders) Closed above the 200 and confirmed the warning phase. Watch for the upward sloping 200 to hold.
GLDDigesting the higher levels from the move up on 8/15. Watch for 131.39 to hold.
USO (US Oil Fund)Look for 36.88 to hold. If this level breaks, expect a dip to the 50 DMA.
OIH (Oil Services)Closed under the 50 DMA, bringing this into an unconfirmed warning phase.
XOP (Oil and Gas Exploration) Inside day. Closed under the 50 DMA, bringing this into an unconfirmed warning phase.
TBT (Ultrashort Lehman 20+ Year Treasuries) Made new yearly highs today.
UUP (Dollar Bull) Gapped up and held the 10 DMA.
EWW (Mexico) Subscribers: Now in an unconfirmed Bear Phase.
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)
KKD Watch for a breakout or reversal against the 10 DMA.
CI Inside day. Watch for a breakout over today’s high and the 10 DMA.
BMRN Watch for a breakout or reversal against the 10 DMA.
YELP Watch for a breakout or reversal over the 10 DMA.
GPOR Inside day. Watch for a breakout over today’s high. Today’s low must hold.
CELG Strong move from the gap and the upward sloping 50 DMA. Watch for a breakout or reversal against the 10 DMA.
GILD Watch for a breakout or reversal against the 10 DMA. Accumulation day in volume today.
UA Climbed back over the 10 DMA. Watch for a reversal or breakout.
CSIQ Accumulation day and good support on the 50 DMA. Watch for a breakout or reversal.
Category 4: (Rip Tide) N/A
Other:
IGT Inside day. Watch for a breakout over today’s high. Today’s low must hold.
DG Nice bounce from the 50 DMA, over the 10 DMA. Watch for a breakout or reversal against the 10 DMA.
KOG Holding the 10 DMA and over the strongly sloping 50 DMA. Watch for a breakout or reversal against the 10 DMA.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NFX Under 3 downward sloping moving averages. Watch for a breakdown or reversal. 22.15 is next support.
LPX Inside day. Watch for a breakdown under today’s low. Today’s high must not break.
NBR Broke 3 converging moving averages today. Watch for a breakdown or reversal. Unconfirmed Distribution Phase.
BBRY Inside day. Short only if it breaks today’s low and today’s high is not broken.
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
SCCO Unconfirmed Bear phase. Watch for a breakdown or reversal against the downward sloping 50 DMA.
Best wishes for your trading,
Geoff & Matt
