All the four indices had inside day trading ranges (when the range is literally inside the trading range of the day prior). What does this mean? Pause in the action-breath held before the jobs report-you do realize every jobs report is the SINGLE MOST IMPORTANT one of all, right? Seriously, Friday’s report comes on the heels of some good economic news (The GDP, Jobless claims); hence, the fear of tapering since the US economy may no longer need the crutches that the FED has supplied. Psychologically, a great jobs number seals the taper fate. However, even after we lose the crutches, don’t we get some physical therapy? Our muscles atrophied, can the FED really afford to put us on the fast track right away? Doubtful. Be that as it may, my tells-small caps (Russell 2000s) closed green in its inside day. The Real Estate ETF also closed green with an inside day. One more push most likely indicating a near-term (at least) bottom. Finally, rates firmed with the long 20 Year Bond ETF (TLT) sitting on the 2013 lows. Rates certainly look poised to firm some more. Questions are, how much, how fast and is that so bad?
S&P 500 (SPY) The last correction in mid-November-the low made was 177.98. Inside day and it still needs to clear the resistance pivot overhead to change course-180.50 Subscribers: Negative Pivots in this and DIA but QQQ IWM positive
Russell 2000 (IWM) Really-112.43 has to clear to get excited
Dow (DIA) After a 4-day correction, inside day therefore 159.52 becomes an important area to clear.
Nasdaq (QQQ) 84.65 key support with 85.77 point to clear
XLF (Financials) 21.04 is the number I am watching for support
SMH (Semiconductors) 41.00 area now pivotal and really close to taking out 41.44 the 2013 highs
XRT (Retail) Looking a bit heavy unless it clears 87.75
IYT (Transportation) Inside day digestion
IBB (Biotechnology) Made a good 50% correction from breakout over 213 to the peak high-really good one to watch
IYR (Real Estate) Inside day with eyes over the fast moving average Subscribers: Like over 63.15 the 10 DMA
XHB (Homebuilders) Inside day with the 50 DMA still important
GLD It still looks horrid but have to see it break the week’s lows now to negate the reversal candle from Wednesday
USO (US Oil Fund) Rallied to the moving average resistance.
OIH (Oil Services) Correcting in the warning phase, but a case with the longer term charts still looking ok
XLE (Energy) Correcting in the bullish phase, provided the 50 DMA holds up
XOP (Oil and Gas Exploration) Correcting in the warning phase, but a case with the longer term charts still looking ok
TBT (Ultrashort Lehman 20+ Year Treasuries) Over 80.00 will look like crutches off
FXI (China) I need a weekly close over 40.00 to get excited
FCG (First Trust ISE Reserve NatGas) Subscribers: Hung onto the 50 DMA. Over 19.80 looks very good
SGG (Sugar) Possible Slingshot low if holds 2013 and today’s low
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:
QCOM Inside day and like over R1 risk to today’s low-miniswing trade
AMT If today’s low holds, like it over R1 for a hybrid swing target around 82.00
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either 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)
P Made an ORR end of the day. If today’s low holds, still see 35.00
X More miniswing trade if holds today’s low and can clear 27.25
KORS 81.26 is R1 to clear-this looks good for move to recent highs for a miniswing
ALXN Inside day. Tight risk to today’s low and S1 if can clear today’s highs and R1 for a miniswing
TEX Inside day and although we have a tail, would consider an add over R1 36.70 with stop under 36.00
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:
MCHP Condition 4 and way oversold with 41.81 the gap low from 10/31 as risk. Like over today’s highs
JBLU If holds 8.25 and clears 8.55 back in play
MAS Long ½ position against the 50 DMA and will get back in the other half if this clears 21.60
Phase Change:
CCL Touched down on the 200 DMA with a turn up in slope in the underlying 50 DMA. Today’s low perfect risk with a move over today’s high lined up with R1-swing
HSP wow! If 40.90 holds with risk to the 50 DMA after today’s crazy first 30 minutes
SFY A Geoff pick-about to get a golden cross. Inside day. Like over 13.58 with risk to 13.00 for swing
TSLA 2 inside days which means use today’s range for risk and breakout point
NOW Broke out but since today was the day of no follow through, if today’s low holds could have another opportunity-miniswing
CHK 27.22 has to clear and the 50 DMA has to hold 26.56-swing
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
FAST Inside day. Once this breaks 45.86 should see drop to 38-39.00
FFIV If cannot clear 82.40 then looks lower longer term
POT Inside day so if breaks 31.52 could see resumption of move down-monthly chart weak
Category 6: White Cap-N/A
Bye For Now
