Coming into today: “Considering we began with a correction from the highs in all indices and 2 days of a negative short term bias, if Monday continues in that direction, follow-through is the most likely scenario…. Then, we can look for a possible U-turn if the jobs report is a major surprise (well over or under 7.0%).”
The Russell 2000s were the weak link and with all indices in correction mode, we turn our attention to the 50 DMA as next area of support. I continue to note the divergence among sectors and groups.
Several country ETFs are taking it on the nose. In light of a deep freeze across much of the US, oil andenergy prices remain weak. However, the bright spot, financials, keep hope alive. It does seem the market is looking for some bad economic data ahead given the rebound in the Real Estate ETF and the 20-year long bond rallying well. (FED minutes due out Wednesday).
Pandora reigned supreme as it does in our house every time I play my shuffle list for hours on end. Did you know P’s getting “smarter” (ok-maybe even bordering on invasive), assuming your political affiliation and buying habits-all from what you like to hum to?
Overall, we remain cautious ahead of the upcoming calendar range date.
S&P 500 (SPY) Distribution in volume. 182 interim support if the market is to have a turnaround Tuesday. Subscribers: Negative Pivots in all
Russell 2000 (IWM) 114.10 remains pivotal otherwise, see the 50 DMA next point
Dow (DIA) If breaks under 163.58 will expect more downward movement. Otherwise, best shot to hold and lead
Nasdaq (QQQ) Expect to see the 50 DMA unless it clears 87.25
XLF (Financials) New highs, close on the lows puts this in reversal possibility-but as the best in show, that has to prove itself out
SMH (Semiconductors) The 50 DMA here looking attractive
XRT (Retail) 86.45 the 50 DMA and a key to hold for confidence
IYT (Transportation) 128.00 remains a good support level to see if there’s anything left
IBB (Biotechnology) Couldn’t hold 225 which means back to looking at 218
IYR (Real Estate) A better chart but in its bear phase, vulnerable until it takes out the 50 DMA
XHB (Homebuilders) Big fall from grace with 32.24 the spot to hold
GLD 121.50 resistance
USO (US Oil Fund) Definitely near-term oversold now
OIH (Oil Services) Looking vulnerable to the 200 DMA
XLE (Energy) Monday turned out not as decisive as I would have expected given its remains holding the 50 DMA
IFN (India Fund) Subscribers: A weekly close over 20.00 will be a signal to go in
CORN (Corn) Subscribers: Long small position as it cleared and confirmed the slingshot low. The 50 DMA next hurdle 31.60
BAL (Cotton) Subscribers: Over 52.76 looks good for possible move over the 200 DMA
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:
CBST R1 and today’s high line up a run to the recent highs or around 72.00
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)
FITB Maybe slingshot high, but if holds today’s low then perhaps back over 21.10 good low risk entry
SFY Marginally held the 50 DMA for our now ½ position for swing-will add the other half if clears today’s highs
PANW Never had the ORR and in the aftermarket is strong based on M&A news. Nice chart-will watch this one for sure
TXT Inside day. If holds 35.89 like over 36.94
XRX Reports January 24th. Returned over the 10 DMA and filled gap from12/31. Like over 12.25 with risk 11.98
FB cleared the 10 DMA. 55.90 now good risk point
SYK Over 75.60 takes it to new multi-year highs with target around 79.00. Risk is 75.00
Category 4: (Rip Tide) N/A
Phase Change:
JCP Held onto the 50 DMA ta 8.60 for dear life. Now, has to clear 8.96
VNO Inside day. Confirmed bullish phase. Now, over 90.00 looks good
VRTX Prefer ORR against the 73.80 support but nice looking chart
KRFT Don’t want to lose sight of this should it clear the converging moving averages and today’s high.
Shorts: We are short a ½ position by being long TWM the ultrashort.
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
QIHU Inside day. Under Friday’s low 78.70 looks good for move down to 75.00 area
ANF 33.00 good risk as this looks like a very troubled company based on chart. 30.00 next support
Bye For Now!
