Well, well, well. We fell off our diet and succumbed to lunch at the “21” Club after all. NASDAQ was the tortoise that finished the race the strongest after the Dow (DIA), our hare, started the ball rolling. Plus,NASDAQ returned over the 50 DMA to get back to an unconfirmed bullish phase-we need one more day for confirmation.
Concerning volume, SPY, DIA, QQQ all managed an Accumulation day in volume which acts as a welcome relief to the surging volume we saw on the downside earlier. The holdout on big volume (or big enough) was the small caps (IWM).
But the story began with the DIA or Dow, once it made a new 60+ day low, then gapped above the 200 DMA the next day and didn’t look back.
Now that 2014 is the Year of the Galloping Horse, with 100 or more point swings in the market either way becoming the norm, we look to next week as time for certain sectors all still in negative phases to catch up-Retail, Semiconductors, Financials, or, NASDAQ (and Biotechnology-in the world of its own) might find themselves lonely at the top.
S&P 500 (SPY) 180.98 the 50 DMA and key to cross and hold. Under 177.40 trouble again Subscribers: Positive pivots in all.
Russell 2000 (IWM) Eyes here as they remain the weakest index. Over Friday’s high would be welcomed, but if fails to cross that boundary and turns south, hard to imagine a sustained rally in the others for much longer
Dow (DIA) A good rally to a near midpoint between the 2014 highs and lows. That makes Monday a pivotal day here for sure.
Nasdaq (QQQ) Has to defend 86.45 now and continue to show leadership, especially now that all the big guns have reported.
XLF (Financials) 21.50 is the 50 DMA and the beacon for this to cross. Otherwise, still see it as a great rally to resistance
SMH (Semiconductors) 41.63 is the 50 DMA here. Do or die
IYT (Transportation) Touched the 50 DMA but couldn’t penetrate. This is what I mean when I say that the market rally in indices needs the front linesman to come out swinging
IBB (Biotechnology) The range in this ETF has blossomed to nearly $8.00. Now that sure says something
XRT (Retail) Alas, with all the strength, this could not get over the 200 DMA. Therefore, we officially designate this sector as the most important “one” to watch. Over the 200 DMA, great-if rolls over, pay your check and go back on a diet.
IYR (Real Estate) Have been writing about the bottoming formation for a while. Now, this is close to the 200 DMA
XHB (Homebuilders) Sitting on the 50 DMA
GLD Looks a lot better and still has lots of room
USO (US Oil Fund) Unconfirmed phase to accumulation
OIH (Oil Services) Here is another group wrestling with the 200 DMA
XLE (Energy) Did clear the 200 DMA here and now needs to defend it
XOP (Oil and Gas Exploration) Ok but not that impressive
TBT (Ultrashort Lehman 20+ Year Treasuries) This week, the rates could firm based on what I see on the weekly and monthly charts here.
PHO (Power Shares Water Resources) Subscribers: 25.64 needs to clear and Friday’s low needs to hold now that this has an unconfirmed phase change to bullish
KRE (Regional Banks) Looks like a bear flag forming.
TAN (Guggenheim Solar Energy) Subscribers: Heading into some resistance but the longer it holds the moving averages the better
CORN (Corn) Subscribers: Great consolidation .Over 31.78 perhaps an add
BAL (Cotton) Subscribers: Big report on Monday
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
***Note: I want to thank Matt for doing such a great job in the Daytrading room while I nursed myself back to health. Unfortunate to have missed the rally, but, the open equity looks good and of course, if you ain’t got your health….Look forward to another week of big moves!
Category 1: (Aloha) N/A
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:
SCTY Reports February 24th. A cross over the 10 DMA and R1 is good ti wit for a miniswing trade ahead of earnings
ISIS Reports February 27th before open 47.30 or S1 good risk point with move over 50.25 good reason to see a run before earnings.
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)
MRVL 14.75 now support and has a good look on the monthly chart
NBL Huge move on Friday and stopped at the 450 DMA. A gap up would be noteworthy, otherwise, an ORR is best
TXT Back over the 10 DMA and if holds Friday low, can try this one again
MCHP Improved in condition crossing the 10 DMA. Now, has to hold Friday’s low and take out 45.00
WFC Of this group, this is a 2014 pick and looks the best crossing the 50 DMA. Now, if stays over Friday’s low, then through 45.60 looks strong.
CIEN 22.88 is R1 to cross with the lows of Friday about all I would give this for risk
Category 4: (Rip Tide) N/A
Phase Change:
MBI Reports February 27th Over the 50 DMA and over 11.78 clears the 80 month moving average with risk Friday’s low
KBH Doji day over the 200 DMA. 18.59 a great risk point to defend if clear 19.00
AMPE Leaving this here but really have to swing trade it. Like over 8.60 with risk 7.90
Shorts: Keeping an eye on a couple, but with market strong, not making any official recommendations until we see how Monday morning plays out
Bye For Now!
