If one un-knew coming into today, sat and listened, then one would have been reticent to load up considering that while the small caps and NASDAQ made new highs earlier this week, the S&P 500 did not, while theDow languished.
Speaking of the Dow, it touched down and held the 50 simple daily moving average although broke the important 2-week into the calendar year low.
The Real Estate, Homebuilders, Gold, US Oil Fund, Transportation all held up well or outperformed. Certain Commodities have also rounded the corner-all of the above, interest rate sensitive groups.
The Chinese New Year, almost upon us, celebrates the Year of the Horse. However, thus far, we can take that one step further and call this year “The Year of the Horse of a Different Color.”
S&P 500 (SPY) Holding the 2 week low, but flirting with the 50 DMA. If bulls, not horses nor bears are around, they need to come out to play on Friday Subscribers: Negative pivots in all
Russell 2000 (IWM) Maybe not so much a winner, but certainly with NASDAQ, the neck and neck (yes will squeeze whatever I can from the horse metaphor) for the 2 most likely to succeed in holding everything steady
Dow (DIA) Really, have to see this bounce
XLF (Financials) Rotation into regional banks have put this group under the 2-week low-touched the 50 DMA and bounced marginally
SMH (Semiconductors) Not running here right now, but I will say it tested and held in a good spot on the daily
IYT (Transportation) I like when this group does well, but it’s not enough to keep everything sturdy. Just enough to keep us from getting too negative
IBB (Biotechnology) Even a fearless leader has to take a break
XRT (Retail) wouldn’t necessarily buy now, but a bounce is not unexpected to around 83.75
IYR (Real Estate) Started to think this might be doing more than just bouncing-good be a sleeper for 2014.
XHB (Homebuilders) Inside day which will make this a fave for tomorrow to follow one way or another
GLD 119 amazing support and now, this is signaling a near term buy
USO (US Oil Fund) Confirmed recovery phase
XLE (Energy) Back to an unconfirmed warning phase
XOP (Oil and Gas Exploration) In a bull phase, but fell to the pressure
TBT (Ultrashort Lehman 20+ Year Treasuries) So much for a bounce off the 200 DMA-well under it now
UUP (Dollar Bull) Back to unconfirmed bearish phase
KRE (Regional Banks) Like to see this hold today’s low
EWG (Germany) Subscribers: Could be flagging for another over 31.63 R1
CAF (China “A” Shared Fund) Subscribers: Holding the 200 DMA for now and potentially bottoming
CORN (Corn) Subscribers: Tomorrow we should see more definitively what this is made of
JO (Coffee) Subscribers: Eyes here still
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:
P Reports February 5th. If holds today’s low and clears 35.15 R1, could be another pop into earnings
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)
VMC Reports February 3rd. 60.27 the old high now the place to hold for a possible Opening range reversal trade
TWTR Reports February 5th Great close now watching it to clear 63.44 R1 and hold 61.55 area
MRVL Held up well with an inside day. Has to clear 15.35 and hold around 15.15
OC Reports February 12th. Negative pivots but an inside day which means over today’s high clears R1
Category 4: (Rip Tide) N/A
Phase Change:
CBL Reports February 4th. Confirmed the slingshot low. Now needs to clear the 10 DMA.
CYH Reports February 18th 39.00 now good support to work from with a good close.
HUN Reports February 11th Possible Slingshot low if confirms over today’s high and R1
DRI Closed back over the 200 DMA which means if holds 50.75 good to trade for a phase change confirmation
Shorts: If SPY breaks the 2-week low, then we can look again at SDS
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
APA Provided it doesn’t clear the 200 DMA, still good short with room to 74.00
Bye For Now!
