The market is so blissed out on this holiday run, it barely noticed the declining oil and Russian ETF prices. After 2 dramatic inclines, the recent highs elude theSPY, DIA and NASDAQ yet interestingly enough IWM failed by centimeters to meet its 11/25 high of 118.78 with Thursday’s high 118.73. Significant? Everything is potentially significant in the Year of the Contrarian Horse.
What is definitely significant and worth repeating is the self-fulfilling statistic that since 1980, the SPY has been higher in December 82% of the time when the market has been in a bullish phase. December 1st close was 205.38. Therefore, after Thursday’s session is now officially over that price. So far so good. If it does nothing else but sit around at these levels, statistics fulfilled. If it climbs higher excellent-nice gift to conclude a tumultuous year. If it closes out lower, then we are back looking at losses that are generally less than one percent adding a tad more to that percentage.
The leading equities were mixed. Some Retail, some Biotech, someSemiconductors as far as the typical momentum stocks go had a great day. Others that have been seriously beaten to a pulp woke up: Tesla, Solar City-yes, Elon, you got a bit richer, Freeport-McMoRan, and MGM Resorts, to name a few.
The Interest Rate picture cooperated with the reverse psychology I have been writing about. If rates stay too low, it means the market is in trouble. Thursday, rates firmed but not by nearly as much as the market did-I’d say, friendly for market but not ebullient.
But let’s not forget how this year has gone thus far-just when the bulls getcomfortable, volatility grows as selling balloons wreaking havoc. I wouldn’t exactly panic here, but I would anticipate anything as long as the rates stay low, and oil, Russia, emerging market pressure continues.
S&P 500 (SPY) The only thing to add here is whether or not it can match, clear and/or take out the recent highs. 202 is pivotal Subscribers: Positive pivots in all
Russell 2000 (IWM) 118.78- a gap above will look pretty if it holds
Dow (DIA) 178 resistance and if that clears looking at new highs likely. Trouble under 174.50
Nasdaq (QQQ) 105 resistance and 103.35 area support to hold
XLF (Financials) 24.45 key support if this is to continue
KRE (Regional Banks) About to have a Golden Cross
SMH (Semiconductors) 55.40 pivotal and 54.94 key tight support to hold
IYT (Transportation) 162 major overhead resistance
IBB (Biotechnology) Not surprising this is so close to the highs
XRT (Retail) Made a new high
IYR (Real Estate) Very near to the highs-also not surprising
ITB (US Home Construction) Amazing how well this held the 200 DMA on the correction and now, into resistance so must continue forging on
GDX (Gold Miners) Watch the 50 DMA for a phase change
USO (US Oil Fund) Looks ugly which all of sudden doesn’t matter? Good for consumers, bad for certain economies, could be deflationary
XLE (Energy) Like this best of the four oil/energy related ETFs I feature
TAN (Guggenheim Solar Energy) Subscribers: Like better over 34.07 which was also today’s high
TBT (Ultrashort Lehman 20+ Year Treasuries) 48.06 point to clear
UUP (Dollar Bull) Nice comeback greenback!
EEM (Emerging Markets) Maybe the whole emerging world is bottoming
BAL (Cotton) Subscribers: Worth watching if clears the 50 DMA
SGG (Sugar) Subscribers: Island bottom here if confirms one more day-then we could have a low risk trade-but didn’t have one in the futures
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:N/A
Category 2:N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy an 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)
HCA 74.80 all-time high to clear for a good day to miniswing trade
AVGO Relatively quiet but held 100.39 which has to continue to hold
MU Has to clear 34.84 for a daytrade add
PNRA Still like this if holds 166.10 and clears 170
FFIV Held tight all day so now, looking for it to clear 133.70 and hold 131.12
AAPL 111.50 is key support if this is to continue
Category 4:N/A
Phase Change:
SCTY Unconfirmed phase change to recovery so like to see it holds 53.06
TEX Confirmed slingshot low and rested on the 80 monthly which I like. Has to hold 26.94
MGM Slingshot low if holds 18.00. Also held the 80 monthly moving average on this correction
GLPI confirmed the slingshot low like best over 29.32 for a swing
GERN Thinking over 3.35 we get back in
SFM Inverted hammer doji on the channel line-watch the way it reconciles
Reports in the morning: BBRY Looks best over 10.23 the 50 DMA with swing risk to 9.50
Shorts: Needs some new setups but watching GOOG KORS AMZN for now
Category 5: N/A
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
