So far this year, after the market closes I typically walk around our house, gym, grocery store, restaurant-anywhere really, and pretty much until we say goodnight to one another, either muttering a combination of guttural sounds (geesh, oy, wow) or gesturing a number of facial expressions (rolling eyes, grimace, lip biting).
If these utterances and ticks surprise you coming from a relatively calm woman, I shall explain:
For those of you who aren’t hyper focused on the insanity moves in the stock market and for those of you who are focused but will enjoy seeing it in print nonetheless: In the last 2 trading sessions, the swings have fluctuated by over 400 points from up to down to down to more down from down to more up.
And that’s just the Dow!
I realize the bearish hysteria, if one charted hysteria, would look equally as volatile and tentative. However, in the scheme of things and in an attempt to maintain serenity, I still see a range bound market since the December low and late December or January high. We’re just not used to seeing significant ranges and their boundaries tested in quite this rapid a time. (Enter spinning planets.)
Friday will be the start of a six month calendar range which will most likely have a basis similar to the December to January range. The market remains in aweak warning phase. Until that range rectifies, we could just as easily blast off to new highs as sink down to October 2014 lows.
“There is nothing more harrowing than a deadly hush with the feel of a great noise around it”
? Jessie Douglas Kerruish, The Undying Monster: A Tale of the Fifth Dimension
S&P 500 (SPY) 200.50 which was the support I was looking for, was violated intraday but then, closed above it. After this week, at this point, to get friendlier, have to see that level hold and the SPY clear over 201.80 Subscribers: Negative pivots all
Russell 2000 (IWM) Have to respect that range between the December low and January high. Now if climbs over 118 also have to respect that
Dow (DIA) If holds Wednesday low and clear back over 177 that would be great.
Nasdaq (QQQ) Weakest right now but closed above the 100.69 support, then 99.00. Over 102.25 better and under 100 will drag everything else with it
XLF (Financials) New 60 day low and better close-wouldn’t get long here but if clears 23.75 that’s a boost
SMH (Semiconductors) Held 52 and now over 53.75 a place to go for strength
IBB (Biotechnology) Its almost uncanny how well this held 310 and then ran up from there
XRT (Retail) Possible double top at 97.15. But also holding the 50 DMA well
IYR (Real Estate) Bullish engulfing pattern near the highs
GLD (Gold Trust) We exited most of our long that began last week as a daytrade. Now, unless it clears 120, under 117.50 should work itself lower
USO (US Oil Fund) After double, then triple the average volume, closed great-could be the reversal (also a double the average daily range) in the nick of time to now be perceived well for the market-like to see it clear 18.75
XLE (Energy) After making a new low, also could be setting up for a reversal-OIH and XOP as well
TAN (Guggenheim Solar Energy) Subscribers: A weekly close over 34.45 will be a good trigger
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Double the volume, new high close on the intraday low-yet another making of a potential blow off
UUP (Dollar Bull) No real concerns unless it breaks 24
FXI (China Large Cap Fund) 42.00 down to 41.62 is the area to hold
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:
MRVL classic Category 1. 15.14 is the 10 DMA risk with a move over the pivots for ½ and R1 for the other ½-mini to swing
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:
BKD Inside day. Over 36.08 R1 looks good, 36.34 Tuesday’s high. Risk 35.54
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)
HSY If clears 107.50 good for day to mini risk
BYD over 13.00 is best with risk to 12.00 for swing wide stop
BBY About to clear 40.03 for new highs for 2014-2015. Like best as a mini to daytrade
LAMR Like if holds todays lows and clears 55.85 for a day to mini
Category 4: N/A
Phase Change:
CIEN Tried this once. Now, over 19.60 look again with risk to today’s lows for swing
GLPI Another day I would have loved to buy the ORR. Now, I still like this with risk to 30.90
SUNE Big eyes here over 21.02 with risk to 19.35
PWRD Sitting under the 200 DMA. If clears 19.30 and holds the low of the day it does it, then we have a swing trade (China stock).
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CSIQ 23.00 max risk and looks like it is going to 14.80 the 80 month moving average under S1 21.67
QCOM If stays under 74.00, has room to downside or 70.00 down to 65.00
CBS Under today’s low new short trade with risk then to 55.10
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
