So here we are. One hibernating Groundhog and a Full Moon later we witnessfear turn into hope and grow into glee. Now, worry should be right around the corner.
Why worry? This might have been so January, but those 6 month calendar ranges I have harped on? Well, still intact. Even though the Dow and S&P 500 had a brief trip beneath the lows on Monday, ultimately it’s the closing prices that count and both held the lows adeptly.
NASDAQ and the Russell 2000s (Identical twin of Sybil 2000s) never broke their lows and now are in the middle of that January Range. IWM is back over the 50 DMA once again in its too many times to count hop over/under the warning/bullish boundary. SPY joined in on that unconfirmed bullish phase during the final 20 minutes of trading.
Perhaps the most gleeful news for the market and for yours truly is the notoriety ofvolume surges that I have continually pointed out. These patterns statistically accompany tops and bottoms. Oil (USO) proved textbook worthy in predicting a bottom while currently, the Long 20 Year Bonds (TLTs) after its explosive volume, appears to have topped hence, joins that volume chapter in that textbook.
Concerning that corner piece of the puzzle the Financial Sector (XLF) that Monday’s volume confirmed on Tuesday. A reversal pattern off the lows that will look even better if it can hold above 23.75.
Back to why worry and the January 6 month Calendar Range highs. If recent history repeats itself, this run could be nothing more than another inevitable test of the top of the range which will in turn be met with selling. One cautionary tale-the volatility index remains in a positive phase with convergence around 31.50 (VXX). That’s the number to watch. What might be dissimilar however? You guessed it R-A-T-E-S!
S&P 500 (SPY) Unconfirmed Bullish Phase by the skin of its teeth. 204.47 the 50 DMA to hold 202.75 a good support point and January high 206.88 Subscribers: Positive pivots in all
Russell 2000 (IWM) Unconfirmed Bullish Phase Cybil should not hold 117.33 the 50 DMA with the January high 120.56
Dow (DIA) Warning Nudged the 50 DMA, if gaps above Tuesday’s high will clear the 50 DMA. Support to hold now 174.50
Nasdaq (QQQ) Warning Phase Nudged the 50 DMA, if gaps above Tuesday’s high will clear the 50 DMA. Support to hold now 102.35
KRE (Regional Banks) Going to say noise until it clears 39.00
SMH (Semiconductors) Has a reversal pattern but really needs to clear 54.42
IBB (Biotechnology) Double the average volume Tuesday. Bounce off the 50 DMA with resistance back at 322.50 Support 315 to hold
XRT (Retail) Return to the bullish phase and have to see it clear 96.00
ITB (US Home Construction) Like over 26.16 now
GLD (Gold Trust) Under 120.34 could mean some more pressure in store
GDX (Gold Miners) Over 22.70 could be start of a good move higher
USO (US Oil Fund) Time for digestion
OIH (Oil Services) Over Tuesday high looks pretty good
XLE (Energy) 78.33 support and 83.00 resistance in an unconfirmed recovery phase
XOP (Oil and Gas Exploration) confirmed Recovery Phase
TAN (Guggenheim Solar Energy) Quadruple bottoms since last October
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Big volume on the sell off and closed on the lows. Seems rates may have peaked for real now
UUP (Dollar Bull) 24.70 support just made it today
EWG (Germany) Cleared the 200 DMA
FXI (China Large Cap Fund) Over 42.70 after holding the 50 DMA which means back to seeing upside
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 today’s high and R1 with risk no more than todays low
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)
AAPL Inside day. 119.17 will clear the outside day with risk around 117.80 max. Day to mini
ETR Reports Thursday before open Over 90.00 with risk only a daytrade
DE Reports February 19th Big move on solid volume. Now, if holds 87.00 and better 87.50 could see more upside
AVGO Reports February 25th Top 5 pick in our new yet still unreleased NASDAQ automated system. Over R1 or 104.17 best for a day to mini with risk today’s low
IGT Unconfirmed bullish phase and if holds 17.07 area or the 50 DMA have a good risk to under 16.87
Category4 :N/A
Phase Change:
GE Over 24.50 with risk to under today’s low is good for a swing as a 2015 pick
SODA Reports February 25th Over the 50 DMA is what we are waiting for a mini or 20.17
SUNE Reports February 18th. Cleared 4 moving averages. Will look for an ORR or good swing entry
DDD Reports February 26th. Slingshot with great volume in fact, 4x normal. Worth watching with a risk to under 27 if confirms
GS Big move and great slingshot example. Now, ORR is best for swing
COH 37.35 support for an ORR or move over 38.80 mini to swing
IGT Might be boring but it is a 2015 pick now in the right phase looking for a confirm
Shorts: No great setups yet. Watching GOOG PX GILD BAX and BMRN
Category 5: N/A
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
