While the Groundhog saw his shadow forcing him and all of us back to our burrows with six more weeks of winter, the market also saw its shadow and got a bit spooked.
As hope is probably we human’s most defining feature that separates us from Groundhogs and the like, even if one is sidelined or short, watching the decline of the indices and many other equites is just plain sad (and fear provoking).
To keep hope alive, we need to see the January Calendar Range low, which did hold up in NASDAQ and the Russell 2000s, continue to hold up. The Dow (DIA)must maintain and hold support at the 200 DMA, plus hold its recapture of 172.15. The S&P 500 assisted a lot when it cleared 201.05.
From fear we turn to hope, then move to glee. If all the above price action sticks AND we see confidence return with buying drying up on the safety plays, especially the one we have had for too long now in the Long Bonds (TLTs), that is where I will look. So far, the volume last Friday impressed on the run up with well over the average daily indicating a possible blow off top. As this week began with a red close in TLTs, the volume exceeded the daily average once again.
This volume pattern appears similar to the one the oil ETF USO had last week (only in a bottoming formation) which did seem to confirm as a bottom thus far.
One more piece of the hope puzzle (in fact a vital corner piece) belongs to theFinancial Sector (XLF.) The push with volume over 23.15 seized back the 200 DMA, improved its phase, and furthermore provided a potential reversal pattern.
Of course, since hopeful humans drive markets, if the US market does proceed to climb again, optimism will then transform into worry. Hey, would you rather be a Groundhog?
And the seasons, they go round and round. And the painted ponies go up and down. We're captive on the carousel of time…
S&P 500 (SPY) Warning Phase Although briefly broke January low at 198.55, it rallied well later on. A move over 202.75 will look better Subscribers: Negative pivots in IWM QQQs Positive in SPY DIA
Russell 2000 (IWM) Warning Phase Cybil held the 200 DMA and January low then rallied, although couldn’t quite make it to 117.33 the 50 DMA.
Dow (DIA) Warning Held the 200 DMA and led the charge back over the January low. Needs to clear 174.65
Nasdaq (QQQ) Warning Phase Never came close enough to the January low which was a good reason to not get too negative. Then, cleared back over the 100 DMA with 102.24 the place to clear next
XLF (Financials) Designated driver with its new 60+ day low and rally back over the 200 DMA and January Calendar Range low-all with very good volume too
KRE (Regional Banks) Going to say noise until it clears 39.00
SMH (Semiconductors) Broke the January low 52.07, then came back over. If clears 54.30 much better
IBB (Biotechnology) Maintaining the bullish phase
IYR (Real Estate) Rates will impact this-seems it already has
GLD (Gold Trust) Inside day over support and under resistance-makes sense til rates show their next move
GDX (Gold Miners) Hasn’t really held much interest for me until now. Over 22.70 could be start of a good move higher
USO (US Oil Fund) That’s what you call follow through. Now, some digestion would be more comforting except in commodities I’ve learned not to wait for that
XLE (Energy) 78.46 the 50 DMA
XOP (Oil and Gas Exploration) Unconfirmed Recovery Phase
TAN (Guggenheim Solar Energy) Quadruple bottoms since last October makes me think bottom is in
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs big volume hoping for that blow off top to confirm
UUP (Dollar Bull) 24.70 support
EWG (Germany) Looks headed to the 200 DMA
FXI (China Large Cap Fund) Held the 50 DMA so now we look back at 42.70
BAL (Cotton) Subscribers: Watching for a clearance of 40.84
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:
EA Top 5 pick in our new yet still unreleased NASDAQ automated system. Like for a day trade over 54.55 and then 55.54 can hold for a mini
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:
DLTR Reports February 24th Looks like its about to take out 72.59 and see a good day to miniswing trade.
MNST Reports February 26th. Also in top 5 pick. If holds 116.60 like and if clears 118.56 like more
MRVL Reports February 19th Took off ½ but still like if clears the 15.53 level (will add it back). Risk on whole trade now is the 50 DMA
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)
GLPI We always exit before earnings and so we did. If holds 32.00 will look to reenter. If gaps over 33.24 will look to follow with tighter risk to 200 DMA
LAMR Reports February 24th If holds today’s low like over 56.54 R1 for a miniswing
Category 4: N/A
Phase Change:
SUNE Reports February 18th. Cleared 4 moving averages. Has done this before. Now we see if its real
GS Possible slingshot for a 2015 pick with confirm over 176.66 the 200 DMA and has to hold for a swing
COH Cleared back over the 200 DMA. Like its acquisition of Weitzman shoes. First time over 200 DMA in a year. Over R1 37.93 entry with risk to under 35.90 for swing
EXPE I was unhappy that we got stopped out so did one of my faves-an early break and return over S2 S1 PDL and the 10 DMA-now, needs to clear the 50 DMA at 86.73
IGT 17.10 is the place to clear 16.85 risk
FSLR Reports February 24th. Cleared the 50 DMA and now if confirms could look at a day to miniswing trade
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
DTV Reports February 19th. ½ position which we will exit over 86.04 area
CBS Reports February 12th Under 54.05 looks like we could see 51.50 and over time lower-for now, stop over 57.45 with the 2/3 we have left
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
