I have talked about the power of the phases thus far. In that respect, nothing has changed. All the indices ETFsremain in weak warning phases (I also wrote about the slope of the 50 DMA as a gauge to determine the weakness or strength of a phase.)
The volume on Tuesday’s reversal not impressive enough to make the textbooks. Finally, another favorite chart pattern to note-inside days (when the range of the session is INSIDE the range of the session prior). That happened in 3 out of 4 of the indices. DIA the exception clearing but not closing above Monday’s high.
Inside days typically means a pause in the action or indecision. Therefore, playing Sherlock here, I see a market still in correction, possible ready to resume a move up; however, more likely to resume or remain in the current phase with that nagging chance of the price accelerating to downside.
We shall know soon enough.
S&P 500 (SPY) Inside day. Not sure I would follow aggressively to upside, More interested in SDS if fails the lows Subscribers: Positive pivots in all but QQQs
Russell 2000 (IWM) Inside day. Better than SPY but still hesitant at this point to get long
Dow (DIA) Worked off oversold condition in its current warning phase
Nasdaq (QQQ) AAPL dragged this down which means only if it clears today’s high does it look better
XLF (Financials) Better, but still in warning phase with all the concerns listed above
SMH (Semiconductors) Confirmed warning phase. Also, has to clear Tuesdays high to get interesting
IYT (Transportation) Unconfirmed bullish phase which means has to hold the 50 DMA Wednesday
IBB (Biotechnology) Holding the bull phase and should clear 244 if it’s going to stay there
XRT (Retail) Inside day and couldn’t make it back over the 200 DMA-really needs to or going lower
IYR (Real Estate) Inside day in the recovery phase-now has to clear Monday’s high
XHB (Homebuilders) Bounced off the 200 DMA yet remains under the 50 DMA
GLD Indecisive action here now-decent phase, has to hold and clear 121.50
XLE (Energy) Subscribers: Looking at today’s high as resistance if it begins to turn down again
TBT (Ultrashort Lehman 20+ Year Treasuries) TBTs did not confirm the reversal low-now, the FED will have most immediate impact
TAN (Guggenheim Solar Energy) Subscribers: Made a good move into resistance.
CORN (Corn) Subscribers: One more push will clear the 50 DMA
BAL (Cotton) Subscribers: Narrow range inside day-watch to see if can clear the 200 DMA
JO (Coffee) Subscribers: Inside day with the 50 DMA acting as support
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
NOTE: If you read Van Tharpe, the guru on position sizing and trading mastery, all profitable systems will lose money at times. At that point, the strategy is to reduce position size and stick true to the plan, and not push. Hismarble game highlights “streaks” and how to manage the good with the not so good. Small losses and flat equity curves are meaningless in a tough environment and do not reflect anything more than the normal cycle of any system. The equity curve is the most important aspect. Tomorrow, I will show ours at its current levels.
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 Still like to watch this one especially if clears R1 tomorrow
HSP Reports February 12th. Like this one for tomorrow over R1 with risk to today’s low for a miniswing
Category 2: (Pipeline) N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy 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)
TXT Already reported. Inside day on the 10 DMA which also needs to clear 37.21
TEX Went back to a bullish phase and another 2014 pick to watch. 38.88 is the 50 DMA to watch for a hold
SCTY Reports February 24th. Leaving this here, but has a slingshot high that has to clear
BHI The 10 DMA crossed over the 50 DMA. Now, in a good condition. Over R1 like the risk to the 10 DMA
CCUR If it reports, really like this over 8.50 for a hold against the 10 DMA
Category 4: (Rip Tide) N/A
Phase Change:
LGF Reports February 6th Cleared the 200 DMA and over 32.00 looks good for a move ahead of earnings
KBH Great move today. Our first trade we scratched but now, next move over 18.44 should push it to the 200 DMA and beyond. If not, risk will be 18.00
SFY Reports February 27th Converging moving averages if holds 13.08 and clears today’s high looks good to recent highs.
CHK Reports February 20th. Cleared the 50 DMA. If can hold 26.47 and clear 27.04 has possibility of some legs
CREE Reported. If holds 62.00 went back to an accumulation phase. Like over 62.85
Shorts: watch the range break on SPY DIA for the ultrashorts and XLE XRT as well
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
DKS Inside day under the 200 DMA which means under Monday’s low could drop much further
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
Bye For Now!
