Before I turn my thoughts to sheep and the Chinese New Year, please allow me to see the alien radio signal out one more time.
Last week I wrote about how the volatility index (measure of fear) has beckoned like a mysterious alien radio signal that I simply cannot ignore.
Then, much to my delight, more fodder for that analogy emerged. The Dutch-based Mars One venture just announced a list of 50 men and 50 women selected from 78,000 (ranging in ages from 18-71) who will begin to compete for the chance to take a one-way trip to Mars. The contestants will compete on a reality-TV show with the goal of narrowing it down to 24 prospective crew members for missions to Mars starting as early as 2024. Winners will be expected to start up a permanent colony.
“Last year an MIT study concluded that the venture's plan to send humans to Mars and keep them alive was "overly optimistic" on technical grounds.” NBC News.
And that’s the rub. As the market goes into orbit with many bulls on board(myself included), I still wonder if the persistently strong Volatility Index (VXX)is the market’s way of saying to the “overly optimistic”; “Bulls, you’ll die on Mars”, technically speaking.
For now, I maintain that until the end of June, we have a bullish bias with a market that will have small rallies met by selling and then followed by periods ofconsolidation.
Tuesday, after a long weekend, hard to equate the price action as a rally per se, yet with the higher close, we did see selling on extremely light volume that could also lead one to conclude, the market consolidated at the highs.
S&P 500 (SPY) 220? Maybe if holds now over 206 Subscribers: Positive pivots in all
Russell 2000 (IWM) Another new high
Dow (DIA) Nearly matched the 180.71 high from December 26th
Nasdaq (QQQ) Another new multi-year high
XLF (Financials) 24.90 the January Calendar Range high, 24.37 the support-needs to participate
KRE (Regional Banks) 41.06 the January Calendar Range high
SMH (Semiconductors) 56.64 resistance from December
IYT (Transportation) 205.16 January high
IBB (Biotechnology) 322.46 the January 6-month high which cleared already but now becomes pivotal
XRT (Retail) Inside day and I suspect has lots more to go to the upside
IYR (Real Estate) Inside day and confused by strong market and firming rates
ITB (US Home Construction) Another new multi-year high
GLD (Gold Trust) Under 116.90 down to 115.58-what trouble looks like
USO (US Oil Fund) Unconfirmed recovery phase first time since July 23rd with 20.35 the 6 month January calendar range high
XLE (Energy) Another bump up and this looks like a great base has formed
XOP (Oil and Gas Exploration) Cleared 53.90 and looks good
UNG (US NatGas Fund) Looks better
TAN (Guggenheim Solar Energy) Inside day just under the 200 DMA
TBT (Ultrashort Lehman 20+ Year Treasuries) Confirmed Recovery phase, first time since September 2014
UUP (Dollar Bull) 24.70 support
EEM (Emerging Markets) Basing out-it’s safe, you can come out now!
IFN (India Fund Inc.) inside day and a good chart
EWP (Spain) Subscribers: Over 34.58 fills a gap with an unconfirmed recovery phase change
EWW (Mexico) Subscribers: Over 60.00 should see another $6.00 up from there
EWG (Germany) Resting above the 200 DMA waiting
FXI (China Large Cap Fund) Still long term bullish here
CORN (Corn) Subscribers: Watching the basing action here
BAL (Cotton) Subscribers: 72,000 shares traded on a typical average daily volume of 8,000
SGG (Sugar) Subscribers: Hard to trust but did clear the 50 DMA so watching
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:
KKD Reports March 12th 20.59 max risk with a move over 21.03 reason to see maybe move back to highs or new highs miniswing
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)
WFM Consolidating near the highs so for a daytrade, risk under today’s low
IGT 17.29 now support for an add (type of stock you want to own for a run to 25.00 or higher)
EA Inside day near the highs good for a daytrade to mini
EBAY Inside day. If holds 55.40 the 50 DMA like over 56.60 for a miniswing
Category 4: N/A
Phase Change:
WMT 85.00 support with a move over R1 86.29 good but over the 50 DMA 86.36 even better for a swing
XOM Inside day. Like against 92.65 or a good open over 93.27
SLB Over 89.00 should continue up to 92 near a gap from November 26th
TEX Reported today. Inside day and unconfirmed phase change to recovery
THC Reports February 23rd ORR best
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NKE Reports March 19th Under 91.75 is best for a day to mini
BIDU Closed under the 200 DMA with risk today’s high for a miniswing trade
GOOG for a daytrade since 2015 short pick and although above support at 535, negative pivots
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
