Worthy time digestion rather than price correction with choppy conditions and low volume to end the week.
The Dow closed with an inside day (DIA) marginally under the 50 DMA for an unconfirmed weak warning phase.
Homebuilders cleared a 2 inside day pattern looking promising for this week. Retail held the important improvement in phase change. The Financials were disappointing unable to clear the 50 DMA after trying intraday.
Transportation resumed its move back to an unconfirmed bullish phase. Perhaps, besides the DIA incapable of holding the bullish phase, the other potentially significant aspect to watch for is the SPY. Three attempts to take out the 2013-2014 high thus far, unsuccessful.
Add all of this up and this puts the market in an interesting place-bears and bulls squaring off once again.
S&P 500 (SPY) 184.95 the highs and 181.42 critical support Subscribers: Positive pivots in all except DIA
Russell 2000 (IWM) Close on a new week high right into resistance at 115.74 so no real sign yet.
Dow (DIA) Inside day with one foot out the door the other firmly planted
Nasdaq (QQQ) AAPL closed poorly but if that turns around, look once again here for leadership
XLF (Financials) Warning phase, albeit a weak one
SMH (Semiconductors) Might be taking a rest but not ready to say it’s over unless Monday is ugly
IYT (Transportation) Unconfirmed bullish phase
IBB (Biotechnology) One day I hope all these amazing drug companies impact more than the bottom line for share holders
XRT (Retail) Digesting above the 200 DMA-eyes here
IYR (Real Estate) Digesting here
XHB (Homebuilders) Looks promising if holds above 32.30
GLD See no reason why the cash gold can’t rally another $100 up from here
USO (US Oil Fund) Worked off overbought conditions
OIH (Oil Services) 48.00 like the Berlin Wall used to be
XOP (Oil and Gas Exploration) Over 69.61 may have something
TBT (Ultrashort Lehman 20+ Year Treasuries) Low volume decline
UUP (Dollar Bull) 21.60 an area to watch
EEM (Emerging Markets) Subscribers: The 50 DMA is overhead then the 200 DMA-can make a case for a bottom and a head and shoulders top
FXI (China Large Cap Fund) Over the 200 DMA will be interesting
BAL (Cotton) Subscribers: Golden cross with a move over Friday’ high interesting to see if can clear 56.15 and keep going up
JO (Coffee) Subscribers: Digesting at these new high levels
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:
YUM The 10 crossed over the 50 DMA making Friday’s low a good risk if clears R1 73.26
SHO If Friday’s low holds, looks good over 13.60
OI inside day and compressed over the 50 DMA-like a lot over R1
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)
DOW We never added and now a possible slingshot but will see what happens Monday
FITB Interesting candle with the low from Friday good risk point. Over 21.66 will like better
JPM 2 inside days and like over 57.84 R1
THC Reports after close-A push over 47.50 could take this to another leg up to new highs for last 2 years and beyond
SCTY like the digestion over the 10 DMA and if can get through Friday’s high looks promising
Category 4: (Rip Tide)N/A
Phase Change:
CCL If holds Friday low, back over the 50 DMA and still a 2014 pick to watch
AXL Long ½ position and will look to add if clears and holds over the 50 DMA
ASML Converging moving averages and needs to clear 90.00
KBH Started to firm on Friday and needs to confirm now by holding Friday’s lows
MAS 22.12 support and if good, will clear the last 2 weeks for a better move
WLP Cleared the 50 DMA and has to hold here
ONVO Made it through the 10.47 resistance and now has to keep going
GM We kept our ½ position and if this gaps higher Monday will add most likely.
Shorts: We have a smaller SDS position and have a few on the focus list will mention if the market looks weaker.
Bye For Now!
