Is Day 27 the charm? After all, numerically 27 has strong elements to it. It’s aperfect cube, being 33 = 3 × 3 × 3. In base 10, it is the first composite number not evenly divisible by any of its digits. 27 is the only positive integer that is 3 times the sum of its digits. 27 contains the decimal digits 2 and 7, and is the result of adding together the integers from 2 to 7 (2+3+4+5+6+7=27).
27 is the number of bones in the human hand, the hand you might have used to hold your mouse to buy with on Tuesday. And, “The 27 Club” is a term used to refer to popular musicians who have died at the age of 27. Ok, not so good.
In my world, 27 will be remembered as the number of days it took to finally clear the January 6-monthy Calendar Range high in NASDAQ! S&P 500 touched the January high at 206.88 yet could not close above that level.
The Dow and Russell 2000s are still a bit far so we not only need to see two of the four indices close above that range; ideally, all of the Fab Four need to come to the party.
Most importantly, with the volatility index dropping on Tuesday, I will equally focus on the converging moving averages at 31.50 in VXX to see whether that turns out to be critical support that stops the market in its tracks.
Interest rates firmed, but we hope they find some level of consolidation and do not rise too rapidly. Oil dropped as well, which could be a relief for some and a bane in the side of others. The Financials cooperated adeptly with XLF clearing 24.18 and Regional Banks tested and held the support mentioned at 39.00.
Now, we need follow through. That means some of the sectors that typically lead need to lead now. Semiconductors, Retail, Biotechnology-all three remain below the January Calendar Range high. With Tuesday’s action in the indices, it does stand to reason they all should.
Since Wednesday is 28 Days Later, here’s to nothing resembling post-apocalyptic!
S&P 500 (SPY) Bullish Phase Tested 206.88 the Calendar Range high but could not close there. Wednesday key! Subscribers: Positive pivots in all except IWM
Russell 2000 (IWM) Bullish Phase 120.56 January Calendar Range high with 118.20 now the important support to hold
Dow (DIA) Bullish Phase 179.23 the January Calendar Range high with 176.46 the support to hold
Nasdaq (QQQ) Unconfirmed Bullish Phase Now want to see 104 area hold with 103.08 the 50 DMA. Then, we can talk about 105 and higher
XLF (Financials) Unconfirmed Bullish Phase 24.17 pivotal
KRE (Regional Banks) Now, if clears 40.00 good to go
SMH (Semiconductors) Unconfirmed Bullish Phase With some volume too so has to stick over the 50 DMA
IYT (Transportation) A holdout on clearing the 50 DMA
IBB (Biotechnology) Like now over 319.25
XRT (Retail) Good group and nearly to the Calendar Range high or 96.85
ITB (US Home Construction) Practically making new multi-year highs
GLD (Gold Trust) Sitting on the 50 DMA with the 200 DMA the resistance
GDX (Gold Miners) Needs to clear 22.00
USO (US Oil Fund) 18.30 support
TAN (Guggenheim Solar Energy) I did call out the bottom on this one
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Probably due for a small short covering rally since a bit oversold and close to the 50 DMA
UUP (Dollar Bull) Held 25.00
RSX (Russia) Definitely basing
CORN (Corn) Subscribers: Held 26.00. Waiting for it to clear the 50 DMA
BAL (Cotton) Subscribers: 42.50 level now pivotal
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)
IGT Using Calendar Range Highs, 17.29 is the number to clear
JWN Reports February 19th. Using Calendar Range Highs, 80.05 is the number to clear
BKD 2 Inside days. Can do ½ over 36.72 and add over the Calendar Range high 37.23 swing
AMZN Inside day with a daytrade as best risk against 367.20
AVGO Reports February 25th 107.38 is the January Calendar Range high to clear for a day to mini
BID Reports February 26th 45.00 is pivotal. If opens above have a day to miniswing to look at
WMT Reports February 19th Cleared the 10 and 50 DMAs and still looks good on the weekly and monthly charts. Risk is to 88.62
MNST Reports February 26th Cleared the 10 DMA and now 118 support and 120 some resistance to clear Miniswing
Category 4: N/A
Phase Change:
STT 79.31 Calendar Range high and needs one more day to confirm a bullish phase
GS Basing with overhead resistance-183.37 is a clean risk area though if it sets up
DE Reports February 19th Inside day and consolidation good if clears 89.25 for a day to mini
CIEN March 5th. 19.88 is the January Calendar Range high to clear now
AFL 61.66 is the January Calendar Range high to clear now
SODA Reports February 25th 20.30 should hold for an ORR or opening range entry
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IACI 59.11 to break for a day to mini max.
GILD If this breaks 96.23 the 200 DMA good for a miniswing maybe swing risk
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
