Finally (and happily) we can say that the Fab Four (SPY, DIA, QQQ, IWM)took out the January 6 month calendar range highs.
It took 28 days for SPY and QQQs, 29 for IWM and DIA. To review the interpretation of what this means for the market, we can solidly look now at a bullish bias until July. Does that mean the market will have 2013 dramatic rallies?
I rather suspect the market will more likely see small rallies met with selling. Those dips from profit taking or short sellers will give us periods ofconsolidation. They may look painful at first for the longs, but unless we fail these calendar range highs in the next week, assume sell-offs are good buy opportunities. I would also use much tighter reins when buying strength.
Most fascinating right now are both the Volatility Index (VXX) and the 20 year Long Bonds (TLTs). Both are sitting on major inflection points.
VXX dropped right down into the converging moving averages after its earlier golden cross to a bullish phase. Although not into buying a falling knife, if the area of 31.20 holds and it clears back over 31.75 assume that the small rally we just had in the market will be met with selling on Friday ahead of a long weekend.
The TLTs held the 50 DMA and rallied a bit into 130.50 resistance. If that breaks 129.24 there should be follow through to the downside. Over 130.50, see a move to 132.50 next.
Usually, I reserve the daily commentary for exactly that, commentary. This time though, I am compelled to write more analytically. Oh please don’t think it’s because I’m trying to woo or impress anyone, or put my neck out on the chopping block.
Au contraire. You, my readers are a mirror. I share with you my musings and now I share my trading plan for both tomorrow and going forward given the assumptions from the breakouts over Calendar Ranges in the indices and howinterest rates and volatility might fold into the mix.
“Get your facts first, then you can distort them as you please.”
Mark Twain
S&P 500 (SPY) New highs and not running rich yet but remember what I said about rallies, profit taking and consolidation Bullish Phase Subscribers: Positive pivots in all
Russell 2000 (IWM) Cleared the January Calendar Range making 120.56 pivotal
Dow (DIA) 179.23 the January Calendar Range high which is now pivotal
Nasdaq (QQQ) 106.25 was the multi-year high we saw in November. The gap low from Thursday should now hold
XLF (Financials) 24.90 the January Calendar Range high
KRE (Regional Banks) 41.06 the January Calendar Range high
SMH (Semiconductors) 56.64 resistance from December
IYT (Transportation) Double the average daily volume but not near the 205.16 January high
IBB (Biotechnology) More sobering move with an inside day
XRT (Retail) Cleared 96.85 which is now pivotal
ITB (US Home Construction) New multi-year highs
GLD (Gold Trust) Inside day on the 100 DMA or 117
GDX (Gold Miners) Inside day
USO (US Oil Fund) 19.93 is the 50 DMA
TAN (Guggenheim Solar Energy) No sunscreen needed
UUP (Dollar Bull) 24.70 support
EWW (Mexico) Subscribers: Phase change to recovery if confirms
EWG (Germany) Back over the 200 DMA
BAL (Cotton) Subscribers: If this holds up, will look to buy against the 50 DMA
SGG (Sugar) Subscribers: Watch over today’s highs
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)
FEYE ORR only
WFM ORR only
IGT Using Calendar Range Highs, 17.29 is the number to clear
BKD Inside day Did ½ over 36.72 and add over the Calendar Range high 37.23 swing
MNST Reports February 26th 118 support and 120 some resistance to clear Miniswing
Category 4: N/A
Phase Change:
XOM Big move up to the 100 DMA. 92.68 to 93.00 resistance to clear and like it now around 92.00
YUM Look for an ORR against 74.20
PM Look for an ORR against 83.14
KORS Over 72.25 better but then has to clear 73.10 the 100 DMA and like against 71.39
DE Reports February 19th consolidation good if clears 89.45 for a day to mini
SLB if holds 85.25 and can get back over 86.20 basing with over 88 a breakout
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MDVN Reports February 25th Inside day. Under 101.67 could see 98 or lower for a day to mini
NKE Reports March 19th Under 91 is best for a day to mini
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
