A range is a range of course, of course, and no one can tell the range of its course. That is, of course, unless its course is the January Calendar Range. (Sung to the tune of the Mr. Ed theme song)
Once again, just like last Friday, as the session began, we were ready to pounce as a short seller under the low of the range because as I have mentioned, following the way the range breaks is a high probability trade for the active trader.
Yet, since a range is a range, we exercised patience and did nothing on the shortside in the AM, looking instead to either add longs on a short term basis, or at the very least stay the course on our existing trades.
The December low to the January high range although wide, is now over one month in the making. I find that exciting as nothing beats a technical signal than one that has time on its side.
I have focused on the indices mainly, but also appropriate is a visit to the major sectors and groups and where their calendar ranges fall. Biotechnology or IBB the ETF, made a new January high therefore, has a definite bullish bias.Semiconductors (SMH) are in the middle of the January range yet impressively cleared the 50 daily moving average, hence return to an unconfirmed bullish phase.
Interestingly, Real Estate (IYR) began the session making a new January high, however, sold off from there throughout the day. One can say it failed and will see more correction, or that the 6 month range is neutral to slightly positive with support at the January 2nd high of 78.00. Interest Rates of TLTs tested the top of the range on Tuesday, but did not clear to make new highs.
The point is these ranges are an excellent tool to watch and follow near and intermediate term trends either for trading (if you know timeframes to trade in, etc) or at the very least to provide you with information about different sectors and the underbelly of an overall market that is trying to figure it outalbeit with mixed signals (accelerating warning phases, in the middle of a solid range.)
Go right to the source and watch its course. It’ll give you the answer that traders endorse. A range that’s on a steady course, the January Calendar Range!
S&P 500 (SPY) 202 pivotal, over 204.70 better Subscribers: Positive pivots all
Russell 2000 (IWM) 114.23 huge support and bottom of range. Now, has to clear 116.85
Dow (DIA) 172.12 big number to hold with 176.77 the 50 DMA to clear
Nasdaq (QQQ) 101.35 pivotal, 99 big support and over 103.50 new ball game
XLF (Financials) Closed red making fins a continuing issue to the bulls
KRE (Regional Banks) Gun to head looks lower still
SMH (Semiconductors) Unconfirmed phase change to bullish and needs to hold 54
IBB (Biotechnology) New highs
XRT (Retail) Back under the 50 DMA-another reason market right now, best to keep it simple and have patience
IYR (Real Estate) Possible reversal from new highs
ITB (US Home Construction) Under 24.00 trouble
GLD (Gold Trust) Big volume on the gap higher. Top of a channel on a weekly chart going back to April 2013
GDX (Gold Miners) Unconfirmed accumulation phase
USO (US Oil Fund) Held the recent lows but overall chart heavy-we are flat
TAN (Guggenheim Solar Energy) New multiyear low since September 2013
UUP (Dollar Bull) No blow off since this came back well after Fridays sell off
EWG (Germany): Confirmed a recovery phase
SGG (Sugar) Subscribers: Mentioned that futures cleared $.15 per pound last week. Good follow through Tuesday
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: N/A
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)
MRVL Will most likely use S2 for a stop and like to see this clear 16.00 now
VMC Today’s low max risk for a miniswing should this clear R1 67.59
CI Over 109.24 clears the high with now 108 pivotal
LAMR Over today’s high looks good with risk to 54.44 or better for a mini to swing
Category 4: N/A
Phase Change:
FEYE Waiting for this to clear the 200 DMA at 33.76 with a stop more of a miniswing if sets up
AXLL Unconfirmed phase change to accumulation. Like risk to today’s low and over 43.68 looks good 46.00 or higher mini to swing
ARCC Has to hold 15.76 clear 16.10 then could see a move to 16.60-16.71
FB Reports January 28th Putting this here since one push it clears moving averages and then good for day to mini max
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
DISH Broke the 50 DMA so now has to confirm for a day to miniswing trade with support at 67.25
UA We got out but still interested in this if it fails 66.14 on strength or breaks today’s low-day to mini
TOL Since homebuilders now looks heavy, this has a breakdown under today’s low with a risk to 34.42. Can see 31.00 and lower-mini to swing
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s low
DTV Classic climb up with the 50 DMA big resistance 85.09 risk. Under today’s low lines up with S1 for a good mini to swing
Best Best wishes for your trading,
Michele Schneider
