Really, until the market breaks the range of the first two weeks one way or another, this is noise! However, I noted all last week how disturbing and potentially disruptive the many sectors and groups floundering as 3 out of 4 indices ran to new highs might be.
Counting on a few tech, pharma and solar names to hold everything up seems as flimsy as expecting a single beam to keep a roof secure.
The most fascinating aspect of the market for me right now-the shifting relationship between the US dollar, interest rates, and the metals.
The dollar looks like its bottoming as do both gold, silver (not to mention many miners and copper). If one were to represent that anomaly pictorially, it might look like Picasso’s Cubist Period
S&P 500 (SPY) Could be nothing more than a 2-day correction from the highs since the183.45 area or fast moving average held. Subscribers: Negative pivots in all except DIA
Russell 2000 (IWM) New highs but not quite the reversal strong enough to scream, “Everyone out of the pool!” just yet
Dow (DIA) Although didn’t quite clear 165, it could be forming a bull flag which the market would find relieving
Nasdaq (QQQ) Like SPY, could be just a correction, could be worse
XLF (Financials) Ball and chain or resting-still indecisive
SMH (Semiconductors) Not unexpected after Intel earnings to see this gap lower. Did, however, hold the fast moving average
IYT (Transportation) Another one we hope merely corrected to the fast moving average
IBB (Biotechnology) Still strong if not a bit extended
XRT (Retail) Where public sentiment lives it seems-closer to the 200 than the 50 DMA right now
IYR (Real Estate) 65.06 resistance to clear with 64.00 support to hold
XHB (Homebuilders) Will test the 50 DMA this week for sure only a few cents away. But, will it hold?
GLD Over 121.04, close your eyes and follow
USO (US Oil Fund) Perhaps the theme this week will be more of a move to raw materials and the like
OIH (Oil Services) Looks ok here but under the 50 DMA
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Hard to believe except for the fact that the economy is not as robust as the FED would like
UUP (Dollar Bull) Confirmed phase change to recovery. Subscribers: Long for a swing trade for technical reasons
KRE (Regional Banks) Subscribers: Has to clear 40.56 and did better than most
IFN (India Fund) Subscribers: Now that we got the weekly close over 20.00, will look here for a move over 20.27 or R1
EWG (Germany) Still a candidate now that island gap was filled
CORN (Corn) Subscribers: The longer it holds 30.00, the better I like a move over Friday’s high as good bottoming sign
BAL (Cotton) Subscribers: 60.00 not out of the question
JO (Coffee) Subscribers: Over 23.30 compelling entry for swing
FCG (First Trust ISE Reserve NatGas) Couldn’t confirm the phase change now back to warning-also unconfirmed
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
**PLAN: With the calendar range in the overall indices yet unclear which way it will break, will focus primarily on the following:
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 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)
CCUR Reports January 28th but with an inside day, still could get some traction over 8.13.
OI Reports January 28th. Unconfirmed phase change to bullish. Max risk Friday low-more miniswing trade
TEX Reports February 19th. 2 inside days. Easy risk 41.59 and over recent highs, next resistance 43.50
DOW Reports January 29th Hammer candle setup which means risk to Friday’s lows.
SHO Our swing stop is under the 50 DMA which for a small stock like this, makes sense. Would like better though, if clears 13.60
THC Still looks good if holds around 47.00
CI Reports February 7th before the open. 88.50 support to hold with move over 90.00 good for some momentum for a miniswing
Category 4: (Rip Tide) N/A
Phase Change:
KRFT Trying our patience, but still holding well above the moving averages
CYH Friday’s low critical to hold
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MCD Have small position which we must exit since reports before the open 1/23 but look for 94.00 support or risk to around 95.70
OXY Reports January 30th. Broke the 200 DMA and looks like it can drop even further with risk, 91.40
NOV 77.90 risk with a break of 76.55 weak and confirms calendar range break
COST Under 113.92 breaks the 2 week low with risk at the 200 DMA
WFM Risk 53.40 Some support at 49.00
Category 6: White Cap N/A
Bye For Now!
