Today was a very strange. Of course the most noteworthy event today was Nasdaq’s technical problems which halted trading for 3 hours, practically bringing the market to a standstill while people waited for Nasdaq to get their system running again. Trading resumed at 3:25 EST to a quick burst of volatility. However, there was not a widespread panic which led to any severe moves in the market. It did not seem to alter the market very much. However, I am sure it did not bode well for investor confidence. Although from a purely technical point of view one has to be encouraged. The S&P 500 (SPY) closed above the 50 DMA, bringing it into an unconfirmed bullish phase. The Russell 2000 (IWM) not only held the 50 DMA, it closed above the 10 DMA. Nasdaq (QQQ) managed to close above recent highs and the 10 DMA. And the Dow Jones Industrial Average had it’s first green day in six days, and closed with an inside day.
S&P 500 (SPY) Cleared the upward sloping 50 DMA, bringing this index into an unconfirmed bull phase. Subscribers: Pivots positive.
Russell 2000 (IWM) Held the 50 DMA and cleared the 10 DMA. Subscribers: Pivots positive.
Dow (DIA) Inside day. First green day after six days down. Subscribers: Pivots positive.
Nasdaq (QQQ) Continued higher after trading resumed. 76.19 is an important level to hold. Subscribers: Pivots positive.
ETFs:
XLF (Financials) Watch for today’s low to hold. Looks poised to break the 50 DMA. Still in a warning phase.
SMH (Semiconductors) Sideways consolidating action. Watch for today’s low to hold.
XRT (Retail) Inside day.Confirmed warning phase.
IYT (Transportation) Broke strongly out of its inside day and cleared the 50 DMA. Now in an unconfirmed bull phase.
IBB (Biotechnology) Closed above the 10 DMA and is looking strong.
IYR (Real Estate) Inside day. Watch for today’s low to hold and the high to break.
XHB (Homebuilders) Above the 200 DMA but under the 50 DMA. Holding support but under resistance.
GLDSideways consolidating action. Watch for 131.39 to hold.
OIH (Oil Services)Sprung above the 50 DMA this morning and closed above the 10 DMA. Now in an unconfirmed bull phase.
XLE (Energy) Closed just shy of the 50 DMA after a nice move up today.
XOP (Oil and Gas Exploration)now in an unconfirmed bullish phase.
TBT (Ultrashort Lehman 20+ Year Treasuries) Inside day. Dropped sharply near the close, but held yesterday’s low.
EWG (Germany) Subscribers: Gapped over the 10 DMA and closed at new yearly highs.
FXI (China) Subscribers: Gapped up and closed over the 10 DMA.
EWW (Mexico) Subscribers: Now in a confirmed 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 I prefer an opening range reversal against the 10 DMA to control risk.
CI Strongly broke out of its inside day. I prefer an opening range reversal to control risk.
YELP Watch for a breakout over today’s high, with good risk. Or a reversal against the 10 DMA.
EMN Watch for a breakout or reversal against the 10 DMA.
CELG Inside day, holding the 10 DMA. Today’s low must hold and today’s high must clear.
UA Holding the 10 DMA. Watch for a reversal or breakout.
CSIQ Good support on the converging 10 DMA and 50 DMA. Watch for a breakout or reversal.
MDVN Cleared the 10 DMA today. Watch for a breakout or reversal.
KOG Holding the 10 DMA and over the strongly sloping 50 DMA. I prefer a reversal against the 10 DMA to control risk.
Category 4: (Rip Tide) N/A
Phase Change:
BA Unconfirmed bull phase holding support on the 10 and 50 DMAs. Watch for a breakout or reversal.
Other:
AGCO Nice consolidation on the 10 DMA. Watch for a breakout or reversal.
CLR Inside day, holding the 50 DMA. Today’s high must break and the low must hold.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
LPX Two inside days. Watch for a breakdown under today’s low. Today’s high must not break. If it breaks above today’s high, I would be wary of going long under the overhead resistance.
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
IBM Watch for a breakdown or OR high failure under today’s low.
VTR Watch for a breakdown or OR high failure under today’s low and against the 10 DMA.
Best wishes for your trading,
Geoff & Matt
