When one reads about the horror man inflicts upon man and then all piled up in the course of one day, the business of money-is, well just that-business-not life itself.
Today, we must step back and put a few things in perspective. First, my undying allegiance to market technicals. The 20 year Treasury Bonds, the Russell 2000s and the darling of 2014, Semiconductors, have been the consistent “tell”. They have been whispering caution (semiconductors with their first break from the highs last week)-today, they screamed from the rafters.
However, I take no solace in money made or saved in light of tragedy, hatred, war and the suffering that all of those combined inflict.
So, yes I can tell you that we had a huge volume reversal pattern in the other 3 indices (DIA QQQ SPY). I can tell you that Retail, Homebuilders, Solar Energy and Regional Banks failed their 200 DMA. I can even give myself some slight congratulations on keeping my portfolio in mainly cash and now well outperforming for the year.
Tonight though, I will hug my loved ones and give thanks for the safety of my home and neighborhood. I urge you to do the same!
S&P 500 (SPY) 197 now a point of resistance. A gap lower would make the 50 DMA more probable. Otherwise, the end of the week could also yield digestion Subscribers: Negative Pivots in all
Russell 2000 (IWM) Unconfirmed Distribution Phase. Some support at 111.16 the June lows
Dow (DIA) Held up the best yet still reversed from new highs. With another day of confirmation, that would make this action more negative. I cannot imagine sitting long over a weekend with so much going on, but look here as best clue for that
Nasdaq (QQQ) Confirmed topping pattern today but has support at last week’s low 93.63 to break
XLF (Financials) 22.50 the 50 Dma
SMH (Semiconductors) Second major dump after making new highs and this time with big volume. Phase intact, but tend to think more weakness in store
IYT (Transportation) One of the stronger sectors and a place to look if the market can hold
IBB (Biotechnology) The 50 DMA at 245.09 failed for now
XRT (Retail) A big troublesome sign for awhile now
IYR (Real Estate) Another strong sector to watch if the market holds up
ITB (US Home Construction) As I feared-a one day wonder on Wednesday
GLD Big rush to gold in face of turmoil
USO (US Oil Fund) The 50 DMA at 37.99 to clear
OIH (Oil Services) Made a topping pattern in early July-today confirmed that more so
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs told the story or the nightmare
UUP (Dollar Bull) 21.52 the 2090 DMA to clear
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)
AEM Reports 7/30 New high close but an ORR us better for risk
CSC 63.25 support on this outperformer. Looking for a move to hold though over 64
BAX Reported. 75.94 support and if can if can get back above 76.37 long term charts are set up well
Category 4: (Rip Tide) N/A
Phase Change:
KORS Confirmed slingshot low and one of the few with positive pivots
GLPI Reports 7/29 before open Lasted this long, tomorrow S2 will be higher and if not stopped out, will look to see if can move above today’s highs
X Reports 7/29. Also outperformed and closed with a doji (opening and closing price almost the same) candle and positive pivots
WMT 76.54 risk and if good should clear 77.25
SFM Still holding up and if clears R1 not bad
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IACI Reports 7/30 Closed in an unconfirmed distribution phase and good resistance at 66.43
LNKD Reports 7/31 Today’s high now key resistance with a break of todays low another opportunity to short
OXY Reports 7/31 Unconfirmed warning phase and one I am still longer term negative on after its big move up. 1091.31 is a good tight risk and 100.12 the 50 DMA
D Shorted with a wide stop as this once again went into a strong warning phase and good risk over 70.00
Category 6: White Cap-N/A
