Concerns in the market are not unwarranted, yet there are such bright spots. Therefore, more important than ever to note the sector and group rotations and make sure you are diversified.
With the FED clearly on taper mode, the dollar seems like it wants higher this year. So ask yourself, what will do well and what will suffer if the dollar continues to firm?
And also ask yourself, at what point do we go from deflation in the US economy to reflation (we are a long way off from inflation). If you can answer these questions and come up with a plan, then you are good to go. If not, then I advise you to consult with someone who does have a plan with the macro picture in mind. Otherwise, this year will become costly. This is not 2013!
5 days in and the tone set for indices is correction in a bull phase. The forgiving market of 2013 on the backs of lots of FED action is over. This is not to scare you-well, maybe a little. Scared straight that is!
S&P 500 (SPY) 184 is the area to clear since the gap last week. 182 held up today so if it breaks, see 180 easily. The doji day (when the opening and closing price are the same of really close) shows how tentative things are Subscribers: Slightly Positive Pivots here and in IWM QQQ. Negative in DIA
Russell 2000 (IWM) 115.26 will up the game just as under 114 will bring more selling
Dow (DIA) 164 key support with 165 the point to clear
Nasdaq (QQQ) 87.58 next point to clear, 87.25 pivotal then, 86.00 the big support to hold
XLF (Financials) Inside day and keeping hope alive unless it breaks 21.80
SMH (Semiconductors) Cleared the moving average. 42.30 and over will most likely mean safe to go back in the semi water
IYT (Transportation) Inside day and similar scenario to retail ETF
IBB (Biotechnology) New highs-one very big reason to not be that negative
XRT (Retail) Tested the 50 DMA support and held-needs to do that again or vulnerable
IYR (Real Estate) Could be basing. Need more evidence
GLD Could very well hold today’s low and then move back up-the reversal candle is still intact
USO (US Oil Fund) Testing the low from 11/27-and oversold
OIH (Oil Services) Looking vulnerable to the 200 DMA
XLE (Energy) Like over 88.00
UUP (Dollar Bull) 21.80 now the next point to clear
IFN (India Fund) Subscribers: A weekly close over 20.00 will be a signal to go in
FXI (China) Subscribers: Looks like a brick wall bottom with the 200 DMA at 36.57 to clear.
CORN (Corn) Subscribers: The longer term account still holding against 30.00 the shorter term acct sold out on the new lows
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)N/A
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)
CIEN As long as it holds 24.00 then we could get going again to 26.00 or higher
CBST Reports January 22nd. ORR against 67.85 preferred
FITB Reports January 23rd. If the market is good, then this can push higher. 21.00 a good risk with 23.50 not out of the question
TRIP Held the 50 DMA but didn’t much therefore, good one tomorrow against 84.45 with potential
SFY Inside day. Now, as long as it holds the 50 DMA, can add over 13.85
HSP Over 41.51 like with risk today’s low
SPWR Inside day. If holds 32.28 and clears 34.00 area has potential as it has crossed the 80 monthly
JBLU Now an ORR preferred
MAS Over 23.00 like this one for a move to 25.00 next
ADSK Although a bit late, 49.50 is good support area and over50.50 takes out highs going back to 2008. Then in uncharted territory
VMC good move today and has to hold today’s low with the recent highs over 60.00 reason to think another leg up if clears
THC Slightly negative pivots but had an inside day which means like over today’s high and R1 with risk to the 200 DMA 43.47
TEX over 41.39 clears the 10 DMA and recent resistance. Like this better if gaps over the 10 DMA in the morning
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:
Phase Change:
VNO Inside day
IGT A fave for tomorrow over 17.80 for a starter with an add over 18.05 for a swing
SODA Still working the slingshot and want to see it hold today’s low
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
WFM If breaks the 200 DMA then can use that as a risk for more downside to 49.00
EBAY 53.24 max risk with under 52.30 breaks the 50 DMA
RIG 48.82 risk with support around 46.75
Bye For Now!
