Not sure I would consider today’s relatively meager rally a bottom, rather, more of a potential launching pad should the market hold up going into Thursday.
Clearly, there remains a lot of vulnerability in the indices not to mention uncertainty concerning the geopolitical events.
NASDAQ hung on once again for dear life to the 50 DMA and the bullish phase. All the other indices kept their existing warning or distribution phases intact although we can at least look at the IWMclosing green and think this was either the calm before the storm for a new leg down or signs of more buying around the corner.
However, I would not change anything about the current method of operation-mainly cash, light positions (half of the normal size) and way fewer of them until we actually do see something more substantial.
The Retail, Solar and Regional Bank sectors all had decent basing action. Eyes should be kept there for go to longs if that trend continues in the near-term. Otherwise, keep your life vests on!
S&P 500 (SPY) Over 192.93 and buying should come in BUT under today’s low trouble lurksSubscribers: Negative Pivots in all except IWM
Russell 2000 (IWM) Under 110, 108 is the May low area. Over 112.50 perhaps some new life
Dow (DIA) A better close would have made me more optimistic. For now, going with the lower levels in store theory
Nasdaq (QQQ) 94.00 is the 50 DMA. If that holds and this turns up on good volume, I will get more positive. For now, that line in the sand looks precarious.
XLF (Financials) May lows are under the 200 DMA-therefore, looking at 21.50
KRE (Regional Banks) Subscribers: Possible slingshot low if this confirms tomorrow over today’s highs
SMH (Semiconductors) confirmed warning phase
IYT (Transportation) 142.90 is the recent June low
IBB (Biotechnology) Back barely in an unconfirmed bullish phase
XRT (Retail) Could not close over the 200 DMA but gets brownie points for trying
GLD Converging moving averages and now above them unconfirmed bullish phase
USO (US Oil Fund) Unconfirmed distribution phase
XOP (Oil and Gas Exploration) Inside day against the 200 DMA-like better over today’s highs
TAN (Guggenheim Solar Energy) Subscribers: As tempting as this is after the strong performance, giving this the week to prove or not it can close over the 200 weekly moving average or 39.22
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs -still over the 50 DMA. Maybe under 114.37 that picture can change some to support the theory of higher rates coming
UUP (Dollar Bull) Perhaps a reversal top in place-has to confirm
CORN (Corn) Subscribers: Cleared the 10 DMA and closed well-now has to stay above 26.10
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)
*COST Never gave us an opportunity with a good risk-now look for an opening range reversal
JWN Still in the range but trying to show muscles if can clear 70.00 for a miniswing trade
KMX If holds today’s lows then over today’s high looks a lot better with upside potential given the daily chart pattern
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
*AAPL Inside day with 93.70 the 50 DMA and R1 and Wednesday’s high lined up at 95.68-here because it has held up well
*INTC Has to hold today’s low and clear R1 233.23 which is also over today’s high
Phase Change:
*ONVO Confirmed the phase change over the 50 DMA. Although it has resistance overhead, worth watching for more bottoming action with risk 7.70
*PRU Bricks wall confirms with the move over 200 DMA now a good risk to today’s lows
WMT Reports August 14th. A Mish special alright, except it fired off so fast, no chance to enter. Now, have to see if we can get an ORR
*EHTH Had a confirmed brick wall bottom on the 80 monthly at 20.37-like better over 22 with a risk to 20.11 with the ATR 2.25
*PM A brick wall bottom if confirms-but can look at a reversal and/or a breakout over the 200 DMA 84.66
YOKU Reports August 21st Possible slingshot low if confirms low 18.25-
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BBY Reports August 26th. Confirmed warning phase needs to break S1
AMZN Under 310 still see 300 in a weak market
DVA S1 and today’s low line up well with risk 72.14
NFLX Didn’t clear the 50 DMA at 435.36 but touched it-if rolls over under 422.23, then have another shot-maybe even sooner-depending upon how it opens.
Category 6: White Cap-N/A
