Even Fish Smells Good When You’re Starving To Death
Family Plot
Alfred Hitchcock’s last film, the title purposely evokes a double entendre. Does the word “plot” mean an area in a cemetery or, does it describe a nefarious scheme?
The story, about a phony psychic/con artist and her taxi driver/private investigator boyfriend who encounter a pair or serial kidnappers while trailing a missing heir in California, illustrates how everyone is scamming everyone else.
How does our Economic Modern Family fit into the Scheme of Things?
Last week I wrote about a logical conclusion based on the wide yet proven trading range of 2015 (with some exceptions of course), Regional Banks would begin to recover first, followed by the Russell 2000s, aided by Biotechnology, which in turn would get Granny Retail excited, helping Transportation to heal from its bleed and finally, give Semiconductors a reason to stop falling (held the 2015 low last week at 51.84.)
I could have a lot of fun musing on the players in the market that took on the persona from Hitchcock’s film. Who are the con artists? Greece, the ChineseGovernment? Who are the serial kidnappers? Technical glitches on the NYSE? I guess we can speculate that it’s “they” or the ones who hold both the Bulls and Bears money and profits for ransom as we try to figure out which “con” will last longer.
I can report that “smart” money (hedge fund dollars net position in Index Futures) made the 3rd highest long investment (around $5 Billion) since the bull market began.
Looking at where the key members of the Family wound up, all looked a lot better at the end of last week than where they all began last week. However, all indices remain in warning phases. In the sectors, Retail, Biotechnology and RegionalBanks are in Bullish Phases or 3/5 of the siblings.
Transportation made an impressive move yet remains in a Bearish phase (also confirmed a reversal pattern). Semiconductors posted an inside day after the huge decline last Thursday and have a lot more work to do. Intel reports earnings this week-a big component in the semis.
Circling back to the logic of the Russell 2000 (IWM) as true to the longer term trend after breaking out from a yearlong consolidation in 2014, holding over 120 with possibly a takeout of the 2015 highs still probable, then yes, the smart money might be really smart.
We will watch to see if IWM is the first index to also recapture the Bullish Phase.
In the last 30 minutes of Family Plot, Hitchcock springs one concealed trap after another, allowing his story to unfold in upon itself, to twist and to turn, and scare an amuse with its clockwork irony.
Truth or Dare? Amuse or Scare? Stand by!
S&P 500 (SPY) Return over the 200 DMA and right into resistance at 208. There’s the parameters-208 and 205.67 Subscribers: Positive Pivots
Russell 2000 (IWM) 124.60 the 50 DMA to cross and I like S1 or 123.56 as a place to hold
Dow (DIA) 178 is the number to clear provided it now holds 176.82 the 200 DMA it gapped above last Friday
Nasdaq (QQQ) Conservatively should hold 107, Friday’s low at the least if this has muscle
Volatility Index (VIX) Most significant-monthly chart shows no close over the 80 month MA since 2012 and only once that year. That number now is 20.94.
XLF (Financials) Lots of banks report this week. 24.72 is the 50 DMA to clear
KRE (Regional Banks) Gapped higher Friday making 43.89 a good point to hold for strength. Although this is above the 50 DMA, it has some significant resistance to pierce for a possible new high
SMH (Semiconductors) Over 53.15 much better but over 53.63 is the real point to look at for a reversal. Otherwise, weak
IYT (Transportation) Confirmed reversal pattern off the lows
IBB (Biotechnology) In the best shape of everyone in the family-over the 50 and 10 DMAs. 375 clears a lot of resistance. Under 369 more worrisome for everyone else
XRT (Retail) Closed just shy of 100.00 but did return to an unconfirmed bullish phase
IYR (Real Estate) 74.54 the 50 DMA resistance overhead
XHB (US HomeBuilders) Good close to the week if can follow through
GLD (Gold Trust) 111.85 next point or resistance if we are to assume this will not break the 2015 lows
SLV (Silver) Confirmed the island bottom
USO (US Oil Fund) 18.00 is the number to clear otherwise either digesting or could have more downside
TAN (Guggenheim Solar Energy) 37.50 resistance
TLT (iShares 20+ Year Treasuries) Janet seems less confused and more poised to raise those rates in September.
UUP (Dollar Bull) support at 25.00
FXI (China Large Cap Fund) Island bottom
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
***Market Tone: Short-term Positive 6. Intermediate-Term Neutral, and Long-Term Positive 4. NOTE: Market Tone is updated before the open each day and changes in real time throughout the day.
*All starred picks are from the automated list of picks (which now includes short picks!)
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)
*CTRP Reports July 29th If holds 71.71 Friday’s low, looks good for confirming a phase change to bullish. Over 75.00 even better with a good weekly chart
FEYE Day to miniswing if holds around 48.60. Any OR
*EXPE If holds 105.73 can rally into the earnings report on July 30th. Any OR
*ILMN If clears 221.06 can risk to 218.40 for a day maybe mini since reports July 21st.
*TSLA Risk for swing is 251.87 but for mini can use 256.97 S1 and like on any OR since pivots positive.
Category 4: N/A
Phase Change:
*CIEN Cleared the 50 DMA for an unconfirmed bull phase. Has to hold 23.53 and better if clears 23.95-mini to swing. Any OR
*JAZZ Reports August 4th. If holds 177.16 then cleared the 50 DMA and can confirm especially over 179.00
Reversal Trades: N/A
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
*AMP If the market fails good place to go for a day to mini under S1. Risk will be 124.48
*OXY Inside day. Really, needs to break 72.00 where there are triple bottoms. Then risk is to swing or maybe mini around R1 of that day
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s low
*AXP Classic 6 if it breaks under S1 and Friday’s low with risk to 77.50 Reports July 22nd. Day to mini
Best Best wishes for your trading,
Michele Schneider
