Compared to Friday, this feels more like a drift lower, but let’s not underestimate the power of phases and what information they hold.
The S&P 500 confirmed a warning phase meaning the price is under the 50 DMA for 2 days in a row. So did the Dow. Interesting, and a matter of simple physics really, is the slope of the 50 DMA. In the DIA, clearly the weakest index, that slope is still positive.
That could mean correction waning. It could mean that the real damage has not started or it could mean that givenNASDAQ held over the 50 DMA and where the big guns live (AAPL reported and the post market wasn’t happy with the results) with AMZN and GOOG up shortly), correction over.
Point is, we really don’t know everything yet. Rates firmed today with the FOMC coming up as well on Wednesday, (Janet’s first statement at the helm). Inflection points everywhere with cash the major place to be for now if you are an active investor.
S&P 500 (SPY) Slope on the 50 DMA here is slightly positive. The relative strength on the daily charts oversold and the warning phase (now considered weakish) confirmed Subscribers: Negative pivots in all
Russell 2000 (IWM) Unconfirmed warning phase here making the next support area 12/18 low 110.36 and a move back over the 50 DMA encouraging.
Dow (DIA) Super oversold on the daily relative strength indicators now
Nasdaq (QQQ) Tested and held the 50 DMA. Now that AAPL has reported, that could be history
XLF (Financials) A lot will depend on what rates do from here it seems. For now, warning phase
SMH (Semiconductors) Unconfirmed weak warning phase and where I might look second if the market comes back
IYT (Transportation) Unconfirmed weak warning phase and where I might look third if the market comes back
IBB (Biotechnology) Still in a bullish phase making this the first place to look if market recovers
XRT (Retail) maybe close to a bottom, but would have to defend the 200 DMA
IYR (Real Estate) Let’s see what happens at the 50 DMA
XHB (Homebuilders) Touchdown on the 200 DMA-also a place to watch for a hold or failure
GLD Sniffing higher rates but with the recovery phase intact if holds 119.43 the 50 DMA
TBT (Ultrashort Lehman 20+ Year Treasuries) Possible reversal after making new lows with the 200 DMA resistance
KRE (Regional Banks) Unconfirmed warning phase
TAN (Guggenheim Solar Energy) Watching here since it held the 50 DMA and it’s a group that should have a “green” future. Subscribers: Has to clear R1
CORN (Corn) Subscribers: Inside day. One more push will clear the 50 DMA
BAL (Cotton) Broke the week long consolidation and the 200 DMA.
JO (Coffee) Subscribers: Long against 22.00 with tomorrow a decisive day after an interesting hammer doji candle.
SGG (Sugar) 49.00 is a real interesting spot on the monthly charts with one really oversold weekly indicator
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:
TEL On the 10 DMA looking for a move over R1 with 60.00 a good first target
COG Reports February 20th. Still like this as it held the 10 DMA with again, the move over R1 good if holds today’s low
HSP Reports February 12th. Has to hold 43.56 the 10 DMA and clear today’s high.
TXT Already reported. Held the 10 DMA which makes todays low a great risk if clear today’s high and R1
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:
SCTY Reports February 24th. Also still like this over R1, today’s high and the 10 DMA-all converging with risk to today’s low
Category 3: (Double Up) N/A
Category 4: (Rip Tide) N/A
Phase Change:
CYH Reports February 18th Has to cross the 50 DMA now and hold today’s or even tomorrows low if it does clear it
KRFT Reports February 13th Inside day on a trendline which means over 53.40 holds the trendline and the 50 DMA. Risk Friday’s low
LGF Reports February 6th Held the 10 DMA and just crossed the 50 DMA with positive pivots-one of the few-if clears 31.35 the 200 DMA see a pop before earnings
BHI Consolidating, the 10 is about to cross over the 50 DMA and it’s over the 80 monthly moving average. Over today’s high and R1 line up for that to clear but really, 57.05 has to clear
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
EBAY Broke the 200 DMA and now has the 50- DMA to break at 52.54 with the risk then the 200 DMA
MCD Under 94.04 this could see prices down to 88.00
ETR Reports February 11th Inside day. Under Friday low could see move down to 60.00
Bye For Now!
