With the end of last week and for consistency’s sake, I’d like to review 3 indicators.
Semiconductors-they held the 10 DMA but failed to close above 50.53 which was the ultimate game changer from the topping pattern put in place last week-verdict-INDECISIVE with slightly negative bias.
The Russell 2000s-Inside day and held the 50 DMA but failed to take out 116-verdict- INDECISIVE with negative bias.
The 20 Year Long Bonds (TLTs)-Held the 50 DMA, closed green yet not above 113.82 resistance-verdict-POSITIVE bias for rates.
Looking ahead, a few weeks ago I had Solars, China and Regional Banks on my mind. Now, all are very much back in focus with China in the lead, followed by Solars and ending with Regional Banks. Disclaimer-We have other instruments on our focus list, but for consistency’s sake once again-narrowing it down for you.
FXI-Golden cross last week. Good correction followed by rally. One more push should do it for follow through.TAN-Held the major moving averages. Outperformed the market last Friday. Bottoming formation needs to confirm. KRE-Held the major moving averages. Underperformed on Friday, however, a move back over 40.00 is encouraging.
How the emerging markets versus the US Markets behave relative to one another will be interesting.NASDAQ has to keep up the leadership. And of course, whether the Dow gets back over 17,000 not to mention how the 3 “tells” do will also be huge clues for this week’s action and who wins out-after all, the bulls and the bears are kind of neck and neck.
S&P 500 (SPY) Inside day to add to the indecision plus has to clear 197 and continue to hold 196.13Subscribers: Positive Pivots in all except IWM
Russell 2000 (IWM) Inside day. Held the 50 DMA, filled the gap to 116.05 on Thursday-range to watch
Dow (DIA) Inside day. On the 10 DMA. If holds, looks good
Nasdaq (QQQ) Closed above key resistance and is voted the favorite for showing the market the way on Monday
XLF (Financials ) Yet another inside day on the 50 DMA
IYT (Transportation) Again, over recent highs, close your eyes!
XRT (Retail) Definitely a candidate for concern
ITB (US Home Construction) Not pretty and more concern
GLD Still holding the breakaway gap also not good for equities
XOP (Oil and Gas Exploration) Oversold and on the 50 DMA
TAN (Guggenheim Solar Energy) Subscribers: Like over R1 with swing risk to the 200 DMA 40.48
EWG (Germany) Subscribers: Another possible brick wall against the 200 DMA
EWW (Mexico) Subscribers: Setting up well
FXI (China Large Cap Fund) Subscribers: Look for a move over R1 for entry
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:
ATI Major focus as it returned over the 10 DMA. But we still need to clear R1 45.91 and hold 44.79 or S2
SLCA Inside day-on the Nuggets List and if holds 54.80 looks good over R1 55.89
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)
EW Made new highs but sold off a little-still watch it though since looks like it’s a waiting game-Good risk now about 87.00
XRX ORR only now
WYN Reports 7/24 Inside day and about to go to new highs. Like a miniswing type risk to 76.20 with 77.16 the point to clear
BHP The 50 DMA is best at 69.14 for risk but can also use the 10 DMA at 69.98. Overall chart looks strong
GT Over the 10 DMA so like if holds 27.40 and clears 27.86 R1
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:
HUN Reports July 30th Not horribly oversold but belongs here since holding the 50 DMA with an inside day. R1 27.40 Risk around 26.80
Phase Change:
X A bit frustrating on Friday, but now it is more interesting especially if holds 27.20 or so with 27.50 pivotal
NWL Corrected now with the risk at the 10 DMA 31.50 and over R1 31.93 should resume move up
STT Big return after test of the 50 DMA. Now, R1 and the 200 DMA line up which looks great
TXT Brick wall bottom if confirms over the 10 DMA 37.06 and has to hold 36.50
AXL Thin stock but great risk to 18.96 the 200 DMA and an inside day. Looks like major basing action going on
DDD 55.38 max risk and 56.95 closer place as a pivotal point
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
D Perfect white cap with now slightly negative pivots and 69.85 the 50 DMA resistance and with an inside day watch or break of S1
VMW Reports 7/22 Like under S1 93.46 for a move to break the 200 DMA
Category 6: White Cap-N/A
