Remember our discussion about melt ups, tops and ignoring logic? It surely seems like we are in the midst of a melt up, but not necessarily the making of a top until we see some VOLUME!
Not a huge fan of buying new highs, since I find that it lends itself to sitting long, watching corrections and then hoping to be right. Instead, I am an anticipatory trader, looking for inflection points near lows or major chart points.
With that said, I have several areas I am watching for opportunities, not the least of which are interest rates to firm, along with volatility or VXX, which currently has not tested recent lows and held with an inside day during Monday’s session.
I find that like before one moves into a new community, good to know whether the reputation of the inhabitants is positive or negative. But, regardless, one can always count on finding both awesome and maleficent folks.
Such is our market-seems safe, but careful where you walk.
S&P 500 (SPY) Low volume and although the closing price is just beneath the old high 184.95 after rising above it intraday, not a clear reversal pattern to bank on that the top is in-not yet Subscribers: Positive pivots in all
Russell 2000 (IWM) 117.37 2014 high. Today’s low key to hold
Dow (DIA) Unconfirmed bullish phase with today’s high good resistance to clear
Nasdaq (QQQ) Looks good-like a leader should
XLF (Financials) Back to an unconfirmed bullish phase and has to stay there
SMH (Semiconductors) 43.00 a support level nearby to hold
IYT (Transportation) confirmed bullish phase but still has an overhead gap to fill
IBB (Biotechnology) The Mighty Thor
XRT (Retail) Longer it sits over the 200 DMA the better
IYR (Real Estate) Some economic stats this week which could move this around
XHB (Homebuilders) 33.38 is the 2014 high
GLD Hard to sit with if you’re first getting in up here but does look strong
USO (US Oil Fund) Hasn’t been over 37.50 since October 2013-finding that area resistance now
OIH (Oil Services) 48.00 cleared and held-look for support now at that point
XLE (Energy) 88.54 the 2014 high
XOP (Oil and Gas Exploration) Overbought with a great move up today
TBT (Ultrashort Lehman 20+ Year Treasuries) Back over 72.05 this can move up a lot higher
UUP (Dollar Bull) 21.60 an area to watch
EEM (Emerging Markets) Subscribers: Find today’s move unimpressive and looking now more like a top than bottom on longer term charts
EWG (Germany) 31.93 the 2013 high
CORN (Corn) Subscribers: Holding up well
BAL (Cotton) Subscribers: Couldn’t make the neckline breakout on the close-like if holds 54.50
JO (Coffee) Subscribers: Playing out the tail after a monster move
SGG (Sugar) Subscribers: First time over the 200 DMA since November 2013
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) N/A
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)
YUM 72.42 good risk while this continues to compress looking like a good candidate
SHO 13.15 the 50 DMA and needs to really stay above 13.60 for next leg up
DECK Inside day and good support at 82.62 and the high to clear 86.31
OI 33.70 the major support level with 34.50 the real point to clear
FITB Looking good provided it holds todays lows and takes out 21.70
JPM Looked good today and now has to hold the lows and clear 58.54
SCTY 74.80 lows to defend now that it reported
UAL Has to clear 46.73 and hold 44.75 the 10 DMA
Category 4: (Rip Tide) N/A
Phase Change:
AXL Still looking to add over today’s high 19.80
ASML 89.03 good spot to hold with 90.17 the spot to clear
GM Like a lot better for our add over 36.80
Shorts:
VXX Inside day-Keith did analysis of the divergence between this and the market on new highs. Watch for a move over today’s high (to go long) as good hedge
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AOL Looks like it is about to drop further-to the 200 DMA-especially if breaks 43.28
Category 6: White Cap-Having a 2-3 Day correction over the pivots.. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s lows
DE Inside doji day with a break of S1 and today’s low a good risk to 85.76
EEM Max risk 40.47 for swing and has to now break under S1 39.30
EL Under 67.45 breaks the 10 DMA and S1 for a good risk to 68.50
Bye For Now!
