All four of the major indexes closed higher than yesterday’s close, although not very impressively. Recent support was held in the Russell 2000 (IWM) and the S&P 500 (SPY). However, both indexes were unable to clear the key levels that they needed to. In order for me to have more faith in the market, SPYneeds to clear the recent swing low at 64.19 and IWM needs to clear the 50 DMA. Nasdaq (QQQ) had an inside day today. The direction that today’s range breaks in QQQ will be a good indicator of the market’s next short term move. It is encouraging that the market is holding up at these levels, but it is still very vulnerable. Especially as we consider the unfolding events in Syria and their worldwide ramifications.
S&P 500 (SPY) Watch for 164.19 to clear and today’s low to hold. Subscribers: Pivots slightly negative.
Russell 2000 (IWM) Watch for today’s low to hold. Will be more encouraged if today’s high can clear, which lines up with the low of the gap from 7/10. Subscribers: Pivots negative.
Dow (DIA) Watch for today’s low to hold and today’s high to clear. Today’s high lines up with the swing low from 8/21 and is an important level to clear. Subscribers: Pivots positive.
Nasdaq (QQQ) Inside day. Watch for today’s low to break and today’s high to clear. Becoming compressed between the 10 and 50 DMAs. Watch which way the range breaks Subscribers: Pivots neutral.
ETFs:
XLF (Financials) Tested support at 19.35, watch for today’s low to hold. Good volume today.
SMH (Semiconductors) Opened higher and was bolstered by an impressive day in CRUS.
XRT (Retail) Inside day. Watch which way the range breaks.
IYT (Transportation) Confirmed the warning phase. 112.44 (swing low from 8/15) is an important level to hold.
IBB (Biotechnology) Held support and closed above the 10 DMA.
IYR (Real Estate) Holding the downward sloping 10 DMA.
XHB (Homebuilders) Closed under the 200 DMA, confirmed the distribution phase.
GLDInside day. Watch which way the range breaks.
USO (US Oil Fund)Climbed higher and is approaching overbought territory.
OIH (Oil Services)Impressive move today, considering the overall market. 45.96 is resistance.
XLE (Energy) Nice move today, bringing this ETF into an unconfirmed bull phase.
TBT (Ultrashort Lehman 20+ Year Treasuries) Holding the upward sloping 50 DMA.
UUP (Dollar Bull) Holding the 10 DMA.
EWG (Germany) Subscribers: Tested and held the 50 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) 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:
CI Tested and held the 10 DMA. Watch for a breakout or reversal over R1.
ACAD Tested and held the 10 DMA. Watch for a breakout or reversal over R1.
CBST Tested and held the 10 DMA. Watch for a breakout or reversal over R1.
HCA Two inside days. Watch for a breakout over today’s high and today’s low must hold. Tested and held the 10 DMA.
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)
YELP Inside day. Watch for today’s low to hold and today’s high to clear.
SU Inside day. Due to their proximity and that the outside day is a yearly high, I would wait for both the high of the inside day and the outside day to clear. Today’s low must hold.
Category 4: (Rip Tide) N/A
Phase Change:
SRE Moved into an unconfirmed bull phase today. Watch for a breakout or reversal against the 50 DMA.
Other:
DDD Inside day. Today’s low must hold and today’s high must clear.
CLR Holding the upward sloping 10 DMA. Watch for a breakout or reversal.
ALXN Holding the converging 10 and 50 DMAs. Watch for a breakout or reversal against the 10 DMA.
NFLX Two inside days above the upward sloping 10 DMA. Today’s high must clear and today’s low must hold.
LYV Inside day above the upward sloping 50 DMA. If today’s high clears, it will also clear the 10 DMA. Today’s low must hold.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
HUN Moved into an unconfirmed bear phase today. Watch for a breakdown or reversal under the 50 DMA only.
SPG Watch for a breakdown or reversal under the 10 DMA. 143.20 is support. I prefer a reversal for the greater move that it can make before hitting support.
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
EQR Watch for a breakdown under the 10 DMA only.
Best wishes for your trading,
Geoff & Matt
