Interest rates and the US dollar rose while the market went out on new highs. We can debate and speculate all day long on the Fed policy and how much the market cares or does not care about it. Better yet, how much the market believes or doesn’t believe the dovish sentiments. What we can sink our teeth into is how the market has been behaving ever since the idea of tapering began. A walk through recent history begins May 22nd on the suggestion of higher rates which began a flood of selling. But after a 5 month incline, it is now apparent that that was more of a good correction. Then, the market recovers and makes yet another new high 2 weeks ago. The next correction that we all waited for, never really materialized. Now, we are at new highs once again and it appears that rates are destined to go up; but since the market has such lofty sectors (techs, social media), so is the market. The ball and chain of higher rates is made of Styrofoam not lead.
S&P 500 (SPY) New highs and a close on the highs. What more is there to say? Subscribers: pivots positive in all indexes.
Russell 2000 (IWM) Cleared 104.98 and brought back confidence
Dow (DIA)Cute little doji (opening and closing prices virtually the same) candle at the highs
NASDAQ 100 (QQQ) The leader still leading
ETFs:
XLF (Financials)Cleared 20.67 with a gap higher and worked its way higher still. However, not yet on new highs
SMH (Semiconductors) Working its way towards the gap overhead to be filled-or at least that would be the healthiest scenario
XRT (Retail) Been leading along with biotechnology and one reason that while many held their breath, going short was not an option either
IYT (Transportation) Beautiful technical signal as it cleared 116 with a gap higher and kept going
IBB (Biotechnology) 200!
IYR (Real Estate)Still awful but at least an inside day.
XHB (Homebuilders) Unconfirmed bullish phase
GLDInside day under the 50 DMA Subscribers: Might like this tomorrow-depends on the 50 DMA
USO (US Oil Fund)A good comeback alright. The implications of higher oil prices has its plusses and minuses
XLE (Energy) 84.00 is key
XOP (Oil and Gas Exploration) Amazing move in one of my favorite sectors this year
TBT (Ultrashort Lehman 20+ Year Treasuries) Hardly a confirmation of a reversal as it took out the highs!
UUP (Dollar Bull) Improved phase Subscribers: Another day over the 200 DMA and look for a low risk long entry
EWG (Germany) Do I hear new 2013 highs soon?
EWW (Mexico) Subscribers: Bought a small starter position provided it holds the moving average
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
**NOTE: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.
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:
DDD As long as today’s low holds, Like over the today’s high and R1
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)
GCI With the gap over the 10 DMA, a slow mover but one to watch provided that 10 DMA now holds
BBY Still looking for an opening range reversal to control risk as this is not really overbought
AMZN Improved in condition. To control risk look at 305 to hold and 306 to clear.
GE One slow mover but now over the 10 DMA making today’s lows important
GS Real close to the highs with today’s low max risk
COF Gave the reversal I wrote about last night and now has to clear 70.00
WAG Got back in today now that it is over the 10 DMA. If stays there still see potential to clear 51.22 and keep going
Category 4: (Rip Tide) N/A
Phase Change and/or Slingshot Lows:
BEAM confirmed bullish phase and has to clear 66 hold today’s lows
USG Took home my third try long now that it has an unconfirmed phase change to recovery. Has work to do but if holds the 50 DMA willing to hang with it
MBI Unconfirmed bullish phase and has been consolidating for one month. Over 14 better go or get out under 13.85
AAPL Inside day. Low risk now if use S1 and it clears todays highs
MAS A bit thin and wild, but holding the moving averages with 20.70 risk. Still like for longer term if holds
TCK Metal Mining but holding a recovery phase if today’s low holds and then it clears R1
Shorts:
Category 5: 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 lows
OXY If can break under S1 looks like a good swing risk at 91.10 the 50 DMA
PM inside day. Max risk 90.00 and has to break today’s low
|Bye for Now!
