The first day of 2014 began with negative price action. Now, as we approach the 2 week mark, the writing appears to be on the wall.
With the spectacular moves in certain sectors and with only a few longs, I admit, I felt like we had missed the party boat.
However, as a student of calendar ranges, I figured that if another party boat began to load at the dock, we’d be sure to board and if not, we’d be happy safely on terra firma.
I’m not suggesting we all head home just yet. The phase in the overall indices remain bullish. Nonetheless, everyone needs a toolbox more diverse than buy the dip and hold. Begin with a solid understanding of themacro picture. From there, study the sectors/groups. After that, have a stop loss, target and timeframein mind.
Lastly, notice how quiet the amateurs on twitter become.
S&P 500 (SPY) 181.60 area has been support with the 50 DMA next stop thereafter. I’d be surprised to see a rally from here, but not surprised to see digestion with 183 now resistance Subscribers: Negative pivots
Russell 2000 (IWM) 112 the 50 DMA with resistance now at 114.10 area should this come in weaker
Dow (DIA) Broke the runaway gap. Now, 163.50 resistance with support underneath at the 50 DMA 160.30
Nasdaq (QQQ) 85.11 the 50 DMA
XLF (Financials) Pretty significant fall from the highs. Bank stocks report this week
SMH (Semiconductors) One big reason I did not start out enthusiastic was because my semis left a nasty reversal candle from the mutli-year highs
IYT (Transportation) Possible reversal candle from highs but still a good place to look for any strength
IBB (Biotechnology) Could have been it for now-but lots of underlying support
XRT (Retail) Nasty ahead of retail sales.
IYR (Real Estate) Confirmed recovery phase showing the basing action in play from last week if holds above 63.60
GLD Unconfirmed phase change to recovery
OIH (Oil Services) 200 DMA in its midst
XLE (Energy) Decisive action and not in a good way
XOP (Oil and Gas Exploration) the 200 DMA real close here too
TBT (Ultrashort Lehman 20+ Year Treasuries) A sign of weakness since the FED will taper and yet, rates continue to drop
UUP (Dollar Bull) 21.60 a spot to watch
IFN (India Fund) Subscribers: A weekly close over 20.00 will be a signal to go in in spite of the island top
EWW (Mexico) Subscribers: Inside day and still very much on my radar over Friday’s high
CORN (Corn) Subscribers: Couldn’t clear the 50 DMA but did confirm the slingshot
BAL (Cotton) Subscribers: 53.35 is the 200 DMA to clear as my focus continues to head into commodities
SGG (Sugar) Subscribers: Watch for a gap higher above 52.56 for possible island bottom
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:
EHTH 2 inside days but need to have a tight risk to today’s low and has to clear today’s highs-like for a day to miniswing
YOKU as long as it holds 32.60 and clears todays highs, still in play for possible move up
Category 2: (Pipeline) N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can eitherbuy 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)
XRX Conservatively have only ¼ position but will look for either an ORR against 12.08 or new highs over 12.29 for adding
GD Reports January 24th. For day to mini like if holds today’s low and S1 and can clear 95.75
MCHP Hammer candle after new highs, but if holds 44.75 could be a good risk area and needs to clear 45.50 again
Category 4: (Rip Tide) N/A
Phase Change:
KRFT I’m a persistent trader when I see the possibilities. After ½ position and conservative exit, still eyeballing this if holds today’s low
FDO Reported had an inside day. Pushing against the moving averages with a move over Friday’s high 67.88 ok for a hybrid or miniswing trade
BXP Inside day on the 200 DMA with risk to Friday’s low and has to clear 104.98
SWC Inside day. Today’s low and the 10 DMA good risk. Over 13.00 interesting for continuation
Shorts: We are short a 1/4 position by being long TWM the ultrashort.
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
RAX 35.70 area to break with resistance at 36.50
MON Reported. Risk around 111.50 or the 50 DMA for a move to 110 or lower
FCX Risk today’s high with a move under 35.44 weak til support around 34.00
COST On the 200 DMA which means beneath can see more selling with risk around 114.85
Bye For Now!
