Tell your children to train for jobs in Biotechnology, if appropriate, since that seems to be the place to be for innovation and long positions. IBB, the ETF for that sector closed up 2.46%. Otherwise, Friday was a healthy digestion in the indexes. Looking at other signs, in spite of the Fed meeting last week, rates firmed a bit as did the US dollar while transportation and real estate, although up for the week, closed lower on Friday. Semiconductors made new 2013 highs intraday, closing just shy of that number. The Fed will have to taper eventually and perhaps the market continues to be absorbing that logical conclusion. Gold held onto its gains as well. All in all, a very profitable week with some delicious setups for this upcoming week.
S&P 500 (SPY)169.07 the May 22nd high next critical place to clear. With the gap last Thursday, that low has to hold for now
Russell 2000 (IWM) Not sure I would call that “healthy digestion” but certainly see no reasons for concern at this point unless the gap low from Thursday is violated
Dow (DIA)IBM has been having issues and that is a substantial component of this index. Although it managed to shake that off for most of the week, by Friday, it closed red and with a bearish engulfing pattern against the 2013 highs. At this point, has to take out those 2013 highs or seems a bit vulnerable especially under 153.70
NASDAQ 100 (QQQ) Pretty and into some resistance on the weekly and monthly Bollinger bands.
ETFs:
XLF (Financials)After great earnings from JP Morgan and Wells Fargo-not to mention the “Born in the USA” speech by Jamie Dimon on the financial news stations, this took out the old 2013 high 20.35 by one tick and then closed just on it. Either has to keep going from here or a gap down could mean some trouble.
SMH (Semiconductors) 2013 highs-can we continue to fly?
XRT (Retail) A small rest
IYT (Transportation) Lagging-a sign of pending weakness, or just needs to play some catch up?
IBB (Biotechnology) What is the word for more than darling? Only word of caution-double the average volume which could mean blow off rally. Needs confirmation of course
IYR (Real Estate)67.40 the 200 DMA and key support to hold
XHB (Homebuilders) Confirmed the phase change to bullish
GLDI believe we got ourselves an island bottom!
USO (US Oil Fund)Took out the 200 weekly moving average, first time since September 2012
OIH (Oil Services)Inside day but has to clear 45.50 last Thursday’s high.
XLE (Energy) Looks much better after Friday’s strong close, especially over 82.00
XOP (Oil and Gas Exploration) Inside day. Like this better if can clear 61.82
TBT (Ultrashort Lehman 20+ Year Treasuries) Held the daily chart support and fast moving average. 76 has been pivotal.
UUP (Dollar Bull) Subscribers: Held the 50 DMA with an inside day therefore still in a bullish phase. Looking for re entry.
EWG (Germany) Subscribers: Inside day and right close to the 50 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
**NOTE: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.
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:
MGM 4 day correction inside day. Like to see 15 hold and it clear 15.50-already long from Friday and will look to add if does
GPOR the 10 crossed the 50 DMA and this has a 2-day correction with Friday low max risk. Like to see this clear R1 and Friday’s high
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)
GME Really like this over 43.31 recent highs with a risk to the 10 DMA 42.53
SKS 14.50 a pivotal area. Like to see it hold the 10 DMA and if can clear see move to 15.55-16.00
Category 4: (Rip Tide) N/A
Phase Change:
HOG Reports July 25th 56.14 next hurdle and has to hold 55.00-like to see a reversal to control risk
VAR Reports July 24th. A 2013 pick now back in an unconfirmed accumulation phase providing it holds 68.70. Could see 74.00
MAS Reports July 29th. Inside day right under the 50 DMA. Has to clear Friday’s high
BIIB Reports July 25th. Cleared 225 and if holds that area could see move up to 248 or better
MBI Like Friday’s close. Long already and like it more if holds around 13.75
TRIP Reports July 24th. Inside day. Over the 50 DMA. Like it over R1.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
DVN Under S1 breaks down under the moving averages. Risk would be Friday’s high
POT Back short against the 200 DMA 40.69 and if can break last week’s low should get good follow through
SINA still above the 80 monthly moving average but if cant clear Friday’s high, could see the 200 DMA first at 53.50
Bye for Now!
