“Tis the 3rd day to Christmas, and the market gave to me, 5 Phases Changing, 4 Doji Days, 3 All-time Highs, 2 Golden Crosses, and a rally near 2014 highs.”
For brevity sake, I will focus on the 2 Golden Crosses since they may well be the next great movers for 2015.
The Regional Bank ETF KRE had both an inside day and a Golden Cross (when the 50 crosses above the 200 DMA). I have written about this sector many times this year, and definitely more recently. I am extremely friendly to it and today’s cross gives this a lot more panache!
The small caps or Russell 2000s (IWM) had the Golden Cross last week, yet worth mentioning again as it nears the 2014 highs and could be the next best trade going into 2015.
Overall, the market quietly held up and closed extremely well in the face of declining oil prices, slightly lower interest rates, and a negative turn in the Russian ETF while the US Dollar ran to new highs once again!
A note about Joe Cocker: Recently I received an email from a loyal reader who told me that many of the thoughts I share each night are observations that anyone can observe for him/herself. Of course I respectfully disagreed since there is an observation and then there’s a superior interpretation. Clearly this was Joe Cocker’s claim to fame. He was one of the great rock interpreters. His fame came from what he did with the words to songs written by other performers. Even in the era when songwriting was prized more than singing, he covered many tunes that often actually superseded the celebrated originals. So J.C., here’s to you!! May you rest in peace!
S&P 500 (SPY) Over 208 looks even better. Under 203.40 troubleSubscribers: Positive pivots in all
Russell 2000 (IWM) Another new multi-month high
Dow (DIA) Very close to the 2014 highs
Nasdaq (QQQ) Unless this gaps below 103.10 and continues to fail from there, has to clear 106
XLF (Financials) 24.45 key support if this is to continue
SMH (Semiconductors) 54.75 support to hold
IYT (Transportation) Cleared first line of resistance-has more to go
IBB (Biotechnology) Big drop with lots of pharma news early on
XRT (Retail) Inside day near the highs
IYR (Real Estate) Big day here-multiyear highs not seen since 2008
ITB (US Home Construction) Nice looking chart and looks good for 2015
GLD (Gold Trust) Face plant and perhaps lower for the upcoming year
USO (US Oil Fund) The RSI on the weekly/monthly charts is so super oversold
XLE (Energy) Like this a bit better than the others with its inside day.
XOP (Oil and Gas Exploration) Inside day
TAN (Guggenheim Solar Energy) Subscribers: Plan has been to wait for the 50 DMA-probably best to wait for that
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs not done yet it seems-watch rates carefully
UUP (Dollar Bull) New highs-again
EEM (Emerging Markets) Maybe the whole emerging world is bottoming
CORN (Corn) Subscribers: Looks like its bottoming out
BAL (Cotton) Subscribers: Cleared the 50 DMA for an confirmed phase change to recovery-see if it sticks
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:
WHR Good daytrade potential if clears todays high on the open 191.32 R1
ADBE 72.80 major underlying support and like over pivots 74.67 first then R1 74.97 Day to miniswing
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)
MU Has to clear 35 for a daytrade add
PNRA Cleared the trendline on the close and looks great for tomorrow over last week’s highs 169.43 risk to 165 area
Category 4: N/A
Phase Change:
VLO confirmed phase change to recovery but we took a small daytrade loss. Now, if holds 47.33 can look at maybe a day to mini over 49.25 R1
ONVO confirmed phase change to accumulation -looks like a great base over Friday’s high 7.24 Inside day
SUNE Needs to clear 19.97 and holds 19.10 for a swing
GLPI Basing-needs to hold 29.08-
SFM Held the channel so now a contender for a swing over 32.45 risk 30.45
BBRY Unconfirmed phase change to bullish if holds 10.00
DDD 30.95 a good level to hold and a move over 32.64 would look really good
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AWAY Slightly positive pivots so has to break S1-then 29.67 risk with a day to miniswing trade
NEM fell apart but still looks weak if cannot clear 19.00
KORS Didn’t do much but keep watching for a break of 73.50
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
