The Confident Popped Collar
Wednesday is the official start of the July 6-month calendar range and a chance for us to gauge how our Economic Modern Family might fare given the new parameters within the parameters of the giant trading range thus far in 2015.
Beginning with Big Brother Biotechnology, after the huge run to new all-time highs, no surprise that it backed off from the early morning intraday levels with profit taking. At this point, no scary reversal patterns, but of course, we always keep an eye out for that possibility.
Granddad Russell 2000 is perhaps the most interesting. Although above the 50 DMA, it couldn’t clear 126.50 the new 6-month range high. However, until it breaks under 121.28, selloffs are expected.
Should that level break in IWM, then for the first time this year, we will look to go longer term short.
Presently, we’re focused on Granny Retail who had a peaceful correction from Monday’s high holding the 100 level and Tuesday’s low. For now, this has my vote as the best chance to play catchup to the Biotech and Financial Sectors.
Granny’s 6-month Calendar range high is 101.24. That is the point to clear. Concerning our Prodigal Son, Regional Banks, he’s having trouble getting through 45.00, but did close green and is in good shape.
Regarding our weaker sibs-Transportation and Semiconductors, Trannies are still working the reversal bottom. Semis are the frailest, especially if they cannot close this week out over 52.62.
Janet Yellen is not exactly Janis Joplin (especially since she has poo-pooed the strength of Biotechnology (our Big Bro and its Holding Company), some time ago.
Yet, she does seem to be one very cool customer with her turned up collar, optimism about the US Economy and her remarks that she remains on track to raise rates if the economy evolves as she expects.
Bottom line is that Yellen’s declaration proves that it’s not if the Fed will raise rates but when they will.
With reference to the DJIA and the gremlin driven terror at 18,000, as it marginally holds that level, looks like a case of nerves rather than a full blown panic attack.
S&P 500 (SPY) Confirmed bullish phase. Subscribers: Positive Pivots in all but IWM
Russell 2000 (IWM) 124.75 key support to hold and rally, donw to 124.25. Then, over 126.50 should have more
Dow (DIA) Confirmed bullish phase.
Nasdaq (QQQ) The highs are within reach
XLF (Financials) 2015 high 25.31-pretty close
KRE (Regional Banks) 45.00 next resistance to clear with support at 43.98
SMH (Semiconductors) Intel saved this after a weak performance on Wednesday. A gap over the 200 DMA will be great for everyone else
IYR (Real Estate) 74.50 the 50 DMA resistance overhead
XHB (US HomeBuilders) 36.70 area support to hold
GLD (Gold Trust) Not only is 110 an important to hold but could be we saw a reversal pattern on the new 2015 low with the close back above 110
USO (US Oil Fund) 18.00 is the number to clear otherwise aside
UNG (US NatGas Fund) Confirmed a recovery phase so will see what this has
TAN (Guggenheim Solar Energy) Backed from the resistance-needs to establish a better base
TLT (iShares 20+ Year Treasuries) Holding 2015 lows
UUP (Dollar Bull) 25.45 next point to clear
EEM (Emerging Markets) 39.00 pivotal
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 7. Intermediate-Term Positive 7, and Long-Term Positive 7. 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: (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:
EXPE If holds today’s low, then held the 10 DMA at 107.10. Reports July 30th so a mini to see if can catch some rally ahead of the report. R1 lines up well with today’s highs.
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:
*WETF Reports July 31st Has to hold 21.04 then clear the pivots at 22 and then R1 and today’s highs. Mini best
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)
RLGY Reports 7/31. Broke out today on low volume. Any OR now for a miniswing against 48.00 risk
Category 4: N/A
Phase Change:
NEE Reports July 29th Over the 200 DMA so risk is to today’s low 101.42 max. Any OR
Reversal Trades: (Glass or Brick Wall Bottom or Top):
CLNE Confirmed reversal. Has to hold 6.04. Inside day. Any OR
Shorts: On automated list to watch: ARMH, OXY Under 72
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
*JCI Reports 7/24 On the 200 DMA and if breaks under today’s low looks heavy. Day to mini Risk 48.76 or the 200 DMA
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
