Prepared by Geoff Bysshe, President of MarketGauge, filling in for Mish until December 8th
Pressure Is Mounting
SPY and DIA nudged higher and set new highs while the QQQ and IWM remained in consolidation. For all practical purposes nothing has changed since yesterday so I’m not going to over analyze the situation.
I only have three things to note going into tomorrow.
-New highs moved up nicely and new lows declined. One day does not solve the problem but it’s a step in the right direction.
-Tomorrow we will get employment data and any surprise there can could lead to a big move in either direction.
-Interest rate firmed today after rising for the last two days. TLT held its support where it should have if the recent breakout is one that will move higher. What how stocks react to any big move in this over the next two days of jobs reports.
S&P 500 (SPY) A new high close at recent resistance Subscribers: Positive Pivots in all
Russell 2000 (IWM) Showed the most strength today with a close near the highs
Dow (DIA) Another new high close.
Nasdaq (QQQ) Held the 10 DMA on a doji day, I would like to see this back over 106.00
XLF (Financials) Broke out of the recent consolidation on light volume
KRE (Regional Banks) Broke out of the inside day with strength and confirmed the phase change
SMH (Semiconductors) Closed on new highs but is starting to get extended on the weekly and monthly RSI
IYT (Transportation) Improved in condition
IBB (Biotechnology) A new high close but looking more extended with a hammer doji
XRT (Retail) Bounced back strong after a two day correction
IYR (Real Estate) Doji day near the highs, needs a close over 77.10 to get moving again
ITB (US Home Construction) Started the day strong only to sell off and close on the lows
GLD (Gold Trust) Unconfirmed phase change to recovery
GDX (Gold Miners) Failed to break the 50 DMA at 19.96
USO (US Oil Fund) Again quiet. 2 inside days at the lows. Eyes here to see which way the break out will go
OIH (Oil Services) Quiet
XLE (Energy) Starting to look better.
XOP (Oil and Gas Exploration) major resistance at 52.71 the 80 monthly. This will have a hard time trying to get up again
UNG (US NatGas Fund) Broke support at 19.68. Not looking good!
TAN (Guggenheim Solar Energy) Cheap oil isn’t helping this any, but it is trying
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs rallied just short of PDH
UUP (Dollar Bull) Another new multi-year high close. Extended?
IFN (India Fund Inc.) New 2014 high close
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)
TLT Like for either an ORR against the pivots or a breakout over 120.85
KEY 2 Inside days on the 50 DMA also sitting on weekly and monthly support. Needs to clear 13.46 with risk to 13.15
APD Held the recent range highs. Now like best for an ORR against 144.80
DUK 2 Inside days needs to clear 82.74 with risk under 81.52
IDCC Broke out of a month of compression, not too extended but really only like for an ORR against 51.15
PETM Inside day near the highs, over 79.68 clears 2 week worth of work with risk under 78.00
Category 4: N/A
Phase Change:
BAC Confirmed the phase change to bullish. Best for an ORR against the 10 DMA at 17.08 with risk under 16.93 the 50 DMA
HCA Confirmed the phase change to bullish. Needs to hold 69. Like best for a breakout over 70 or an ORR against 69.07 the 50 DMA
PRU Phase change to accumulation. Needs to hold 86.09 and confirm the phase change. Like best over 86.82 with risk under 86.09
CIEN Unconfirmed phase change to recovery and sitting right on the 80 monthly moving average. Needs to hold 16.05 and clear 16.60 with swing risk to 15.80
XOM Strong despite current oil prices. Confirmed the phase change to recovery. Needs to hold 94.12 and clear 95.50
Focus List: NWL, TJX, F, BSX, MRVL
Shorts: Focus List: QIHU
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
GOOG Still looks heavy, a Break of 528.80 looks even heavier
EQT 3 inside days now needs to break 89.18 with risk to PDH
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
