A couple of notable features of the day after figuring this session would be more decisive. First, SPY or S&P 500climbed back to a bullish phase. NASDAQ came 3 ticks from the 2014 high made in January yet managed a new high 2014 close.
Dow, a bit of a different story as it could not clear the 50 DMA, which most likely means any sell off from here, will hit that index. The Russell 2000s or IWM, same thing. Volume all around gave the market a second accumulation day (when the volume on a green day exceeds the volume from the day prior).
Sectors and groups-the weaker ones got some relief such as Oil Services, Homebuilders (back over the 50 DMA) and Financials (also back over the 50 DMA). Although many others rallied with the indices, no phase improvements. Most concerning Retail, even with several days of strength touched but could not clear the 200 DMA.
Big winners were China and Emerging Markets, most likely relieved to hear Yellen’s willingness to support the economy anyway the FED can.
Going forward, focus has to be on the Dow and Russells. The leaders have done what they can, but without these 2 groups, not saying rally over over-but the theme of 2014, caution on the instruments you choose to buy,remain judicious.
S&P 500 (SPY) 180.98 the 50 DMA now key to hold. Subscribers: Positive pivots in all.
Russell 2000 (IWM) Must hold today’s lows or market should get spooked. Subscribers: Could be back to looking at TWM
Dow (DIA) 160.72 the 50 DMA-like to see it clear and not ruling out that possibility-a gap over-special
Nasdaq (QQQ) 89.00 the 2014 highs
XLF (Financials) Unconfirmed phase change to bullish which means like to see this defend 21.50
SMH (Semiconductors) Remember when I wrote if this gets down to 40.00 buy it?
IYT (Transportation) Didn’t make it over the 50 DMA
IBB (Biotechnology) New highs, of course
XRT (Retail) 81.48 the Promised Land
IYR (Real Estate) A bit extended here
XHB (Homebuilders) An unconfirmed bullish phase marginally
OIH (Oil Services) Cleared the 200 DMA and the 50 DMA-big winner
XLE (Energy) 85.00 some resistance
XOP (Oil and Gas Exploration) Right to the 50 DMA but didn’t cross
TBT (Ultrashort Lehman 20+ Year Treasuries) Cleared the resistance from Friday which could mean more upside here for next couple of days
PHO (Power Shares Water Resources) Subscribers: 26.00 some resistance
EWG (Germany) Gapped over and held the 50 DMA handily
CORN (Corn) Subscribers: Tested but held the 50 DMA
BAL (Cotton) Subscribers: Looks great now since cleared the recent highs-could see another 4.00 up
JO (Coffee) 2 inside days
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:
MRVL Over 14.97 would be worth a follow with risk to the 50 DMA 14.34
Category 2: (Pipeline) N/A
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)
Watch OC-reports before the open and cleared the moving averages today
ISIS Reports February 27th before open Now today’s lows should hold
HIMX For day to miniswing with an inside day which means has to clear 14.79 and hold today’s low
MTW Tight consolidation which means over 28.13 if holds 27.07 looks good for swing
ONVO Hammer Doji on the 50 DMA which means if today’s low holds, could get another shot with a tight risk
WFC We are in. 45.60 should hold.
Category 4: (Rip Tide) N/A
Phase Change:
MAS Over the 50 DMA with a doji day. If holds today’s low, then could still move up to 23-25.00 level
XOM Brick wall bottom. To trade this tight, has to defend 90.80 area. The 200 DMA is at 91.81
AXL 2 Inside days now making this a fave for tomorrow. Can buy ½ over today’s high then add over the 50 DMA 19.67
KSS Reports February 27th 50.52 is the max risk here. And 53.70 a good pre earnings target.
SHO 12.90 good place to look for a possible ORR but could also easily defend the 50 DMA
AMPE P1 9.46 and should now hold 8.50
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AOL If cannot clear 46.00, then could see a drop down to 43.00 and perhaps the 200 DMA
CLR Reports February 26th 108.10 is resistance for this to stay below with support 104.00 then 101.
Bye For Now!
