Clichés: Expressions, ideas, or elements of an artistic work which have become overused to the point of losing its original meaning or effect, even to the point of being trite or irritating.
I’m going with The Glass Half Full/Half Empty today for the sake of a rare usage of clichés generally speaking and of course, for comic effect concerning the market.
Related to the market, to begin with, I did research on the meaning of that expression and found this: The standard 'glass half-full or half-empty' saying is commonly used to emphasize the difference between positive and negative thinking, or optimism or pessimism - or a cynic might say, the difference between irresponsible hopefulness and practical realism.
The S&P 500 makes a classic case for this. Holding support from December’s lows and the 100 daily moving average, one can assess a positive scenario or at the very least, a reason for more upside. Furthermore, the slope of the overhead 50 DMA has an increasingly positive slope making the warning phase weak. New highs? Doubtful, but a glass half full nonetheless.
The irresponsibly hopeless can say that the resistance is palpable, the overhead fast moving average is declining and if crosses under the 50 DMA, look out below. Plus, the reversal patterns at the new highs in 2014 are more than just noteworthy. Add to that, the now stinging statistic of the 5 day down drop to begin this year after that hadn’t happen in over a year prior and you get a half empty crew waiting to short this rally.
The interest rates have yet to show any correction (or firming) especially since the FED states contentment with the low rate status quo. With that said, I never ignore glaring volume patterns therefore, watching carefully. The Small Capsare now closest to the 50 DMA and remain a “tell” or perhaps the “Mittyesque” index to watch. And oil hangs near the lows which one day is scary and deflationary and the next great news for the consumer.
If you are standing on tiptoes on the rim of the proverbial glass like a gymnast does on a balance beam, here’s a technical pattern that might help-The IWM SPY QQQs all had inside days. That is when the trading day of the current day is inside the trading day of the day prior. Typically, one should follow the way the range breaks the following day up or down.
S&P 500 (SPY) Inside day with the 200 level now support and pivotal with a move over today’s high reason to think 50 DMA at 204.30 next stopSubscribers: Positive pivots in all
Russell 2000 (IWM) 116.88 the 50 DMA and after the inside day, looking at 117.77 next. Support to hold now 115
Dow (DIA) 175 pivotal and the 50 DMA 176.14
Nasdaq (QQQ) Inside day and 103.20 huge point as it is the place where the fast and the 50 DMA meet. Support now 100.
XLF (Financials) Inside day
KRE (Regional Banks) As much as I loved this group last year, I am now seeing weakness if it breaks down under 38.00
SMH (Semiconductors) Inside day here too
IYT (Transportation) Inside day
IBB (Biotechnology) Broke out over 310 and now has to hold that level and clear 313.25
XRT (Retail) A strong group and one that could stay in a leadership role if clears 96.00
IYR (Real Estate) New highs not surprising
ITB (US Home Construction) A close over 26.00 is a another feather in the cap of this group for leadership
GLD (Gold Trust) Inside day just under 118 which if clears is positive
GDX (Gold Miners) Inside day
USO (US Oil Fund) Another day of unbelievable volume and no real price change to note that means bottom yet-keep watching
XLE (Energy) Holding December lows
TBT (Ultrashort Lehman 20+ Year Treasuries)Closed red (TLTs) with nearly an inside day with big volume-still very much a blow off top contender
UUP (Dollar Bull) Runaway gap confirmed unless it breaks 24.00
FXI (China Large Cap Fund) CLOSE over 42.00 and reason to think much higher in store this year
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)
IGT 16.82 good risk if clears 17.17-swing
AXL 22.60 is good support and since near the 2014 highs a strong candidate if market holds for new highs-mini to swing
PNRA 172.61 is the 10 DMA to hold and if does, very friendly to this stock longer term-see phases and forecasts
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
EBAY Has to take out 55.50 and hold 54.44 the upward sloping 50 DMA level for a swing
Phase Change:
OC Unconfirmed phase change to Accumulation-like an ORR and also a continuation with risk to today’s low
CYH If holds today’s low and clears 55.69 December highs looks good
BYD Either like an ORR against the 10 DMA 12.41 or needs to take out 13.06
BZH 18.75 now major support to hold and like over 19.50
HUN If we were a buy and hold this would make the cut with a stop under the October low. But, for us, we need to see 22.96 clear with a risk to 21.50 for a swing
COH I’ve mentioned the buyout of Stuart Weitzman so this got my attention. Like the basing action. Risk is 35.50 and an ORR would be good, but not necessary
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
GEL 43.54 good resistance with a move under S1 41.74 good short point
DTV 86.42 is the resistance. With negative pivots candidate for an ORR
NFLX Inside day. Under 315.54 will make a new low
CBS confirmed phase change to warning. Oversold so look for an ORR but under 52.94 after an inside day could be good for a miniswing
DISH Inside day and confirmed warning phase. Oversold so like an ORR best for now
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
