An interesting surprise to begin the week with the market shrugging off any geopolitical or European banking issues and going the way of the World Cup looking for a goal!
I find value in examining the consistent indicators I watch, therefore, making no exception today.
IWM or the Russell 2000s are still very much a concern. Although they held the 50 DMA and closed up for the session, the 116 pivotal area could not hold. Furthermore, add the weakness of the Retail and Homebuilder sectors and it makes one wonder which team one should play for.
The 20-Year long bonds fell (or rates firmed), but TLTs did not break any significant moving averages. We could consider this action digestion.
Semiconductors definitely negated the topping action and closed above the 50.55 pivotal area we were watching for.
China performed super great but with the large gap higher, left the risk a bit uncertain. The Solar ETF could use another day to clarify whether or not it wants to hold and the Regional Bank ETF struggled even in the face of a strong Financial sector. If you recall over the weekend, I had China to win, Solars to place and Regional Banks to show!
Of course the media will love the Dow back over 17,000 but other than feel-good fluff, that number does not hold much water. Tuesdays have been reversal days for the last several months (and not in a good way). A reversal of that reversal day could renew real confidence. If not, back to the summer chop mixed with some unusual volatility for this time of year.
S&P 500 (SPY) 198 now the point to clear to see perhaps that 220 mark provided nothing catastrophic happensSubscribers: Positive Pivots in all
Russell 2000 (IWM) 115.24 will be an important support point to hold and of course, 116 to clear once and for all
Dow (DIA) Made a new high intraday and closed just shy of it
Nasdaq (QQQ) New 2014 high close even if it’s just barely
XLF (Financials) 22.75 now support to hold if the key bank stocks left to report do as Citicorp did
KRE (Regional Banks) Didn’t do much but doesn’t mean that it won’t
IYT (Transportation) New highs should take this to around 160
XRT (Retail) Without retail hard to get excited
ITB (US Home Construction) This is definitely going the wrong way for a bull market
GLD Cannot really say much until this breaks the 50 and 200 DMAs
USO (US Oil Fund) Worked off some oversold conditions
TAN (Guggenheim Solar Energy) Subscribers: Never really broke R1 with gusto but still a major focus area-also like it over 43.13
EEM (Emerging Markets) Possible island bottom if holds the 200 DMA
FXI (China Large Cap Fund) Subscribers: With big gap didn’t chase but will keep watching since longer term bullish
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 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)
ATI Consolidating with max risk 45.08 and worth continuing to watch
SLCA Had an ORR and closed well now has to hold today’s lows
GT Quiet day but still worth watching
A Good move off the 10 DMA now close to highs if clears 20.50 or an ORR would work too
UPS Reports July 29th. Risk to around 102.90 and overall, looks like could see 106 if gets moving
HES Reports July 30th Improved in condition. Support at 98.45 has room to upside
SBUX Reports July 24th Inside day and risk in line to S2
HSP Came back from a drop and over the 10 DMA could see a push before earnings July 30th
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:
STT Reports July 22nd Over the 200 DMA for an unconfirmed phase change to accumulation
TXT Has resistance at 38.95 the 50 DMA but looks good
AXL Forced to exit on miniswing rules. But try again for sure against the 10 DMA 19.47
Shorts: BMRN CBST HOG on watch
Category 5: Titanic-N/A
Category 6: White Cap-N/A
