Clearly some of you are expecting me to write about the inside days in the indices (when the trading range of the current day is inside the trading range of the day prior), comparing the pause/consolidation/hesitation to our peaceful, grazing sheep metaphor.
In fact, one of my twitter followers even wrote me earlier to mention that the action on Monday was like “Watching grass grow!”
Goading (or is that goating) me on, eh?
I’d rather begin this week by focusing on Interest Rates TLTs, Commodities(particularly gold GLD, silver SLV and oil USO) and the Volatility Index as all but oil rallied suggesting we shepherds need to stay frosty in our persistent search for wolves.
I do maintain that dips represent buy opportunities in the indices considering the bullish phase, price above January ranges, digestion near the highs etc.
Yet, with various concerns popping up, we must stay vigilant, prepared for anything. Or, at the very least, consider hedges on long positions whilst the market figures “it” out.
What is “it”? The Russian ETF (RSX) for starters has a lot of room down to 16.00 and can still look okay. However, I do not see that sort of move having a warm reception by the US Indices. The Greek ETF (GREK) also moved down yet, after Friday’s huge bar, fits the “inside day” definition.
Rates or TLTs dropped from 138.50 to 126 in 2 weeks. A 50% retracement move now that they took out 128, points to a move up to 132. This is on the heels of Janet Yellen’s testimony, which begins Tuesday into Wednesday.
With lower rates, GLD hung in there with 116.90 the real resistance to clear before we call this latest action anything other than noise. SLV beckons to me a wee bit more as a move over 16.05 will give us a chance to see if the return to a Recovery phase can stick.
Finally, the Volatility index VXX, given the aforementioned concerns, paints a somewhat sobering picture to start the week with the recent Golden Cross, although trading in a Distribution Phase (price under the moving averages.) One push over 30.05 will be worthy of a bull’s respect.
“In things a moderation keep; Kings ought to shear, not skin, their sheep.”Robert Herrick
S&P 500 (SPY) Inside day near the highs. Subscribers: Positive Pivots in all
Russell 2000 (IWM) Really nice close on the highs with an inside day
Dow (DIA) Inside day near the highs
Nasdaq (QQQ) AAPL is the gift that keeps on giving-we took our 1st partial profit from a long at 120. I mention this for how a swing trade looks
XLF (Financials) 24.90 the January Calendar Range high, and back to waiting for 24.37 to clear
KRE (Regional Banks) 41.06 the January Calendar Range High to clear
SMH (Semiconductors) Inside day
IYT (Transportation) 165.17 January high
IBB (Biotechnology) Steroids
XRT (Retail) New highs intraday but closed just under Friday’s closing price
IYR (Real Estate) Holding the 50 DMA finding relief from the ease in rates
ITB (US Home Construction) Consolidating near the highs.
GLD (Gold Trust) Noise unless it clears 116.90
GDX (Gold Miners) 20.00 needs to hold and over 21.00 gets interesting
USO (US Oil Fund) Held 18 and has to clear 20
TAN (Guggenheim Solar Energy) If this gaps over the 200 DMA 38.82 time to add
UUP (Dollar Bull) Sideways for 3 weeks
EWW (Mexico) Subscribers: Over 60.00 is the place to clear
EWG (Germany) Inside day Needs another push over 29.50
FXI (China Large Cap Fund) long term bullish
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
FDX Reports March 18th 3 days under pivots which means it has to clear today’s high and R1 with risk to 174.65 the 50 DMA
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)
TXT Inside day. If holds 44.60 like on an ORR or early move up for day
AAL confirmed phase change to bullish Like if holds 50.20 with a good weekly chart
SWI Over 51.80 with a Miniswng risk still looks good
Category 4:N/A
Phase Change:
TEX Inside day-like over 27.39 for a miniswing trade against Monday’s low
PM Like over 83.25 if holds 82.50
WMT Over 85.86 is really the spot to clear with then support at the 50 DMA if good
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BITA Reports March 15th Unless this clears over 66.08, can see more downside under 64.10
GOOG 535 is now the resistance to not clear and looks like 522 next stop the 50 DMA
Category 6:N/A
Best Best wishes for your trading,
Michele Schneider
