Not all too surprising, the market retreated from the 4 day rally, which followed the harder and more volume-packed 4 day decline thus ending the week in warning phases in all but the Russell 2000’s(small caps) which actually confirmed the bullish phase. Although the bonds rallied, the dollarsteadied. It seems from a fundamental and practical standpoint, the market is beginning to price in the eventual tapering by the FED probably by September’s meeting. Ultimately that will mean some more divide in how the varying groups/sectors respond. Semiconductors closed confirming a reversal from an 11 year channel. With that technical pattern, expect to find good long term opportunities in that group. Retail should be fine and financials also closed out the quarter well-another area to watch for buy opportunities. Otherwise, Real Estate, Homebuilders, Oil Services,seem most vulnerable for the time being. And gold (GLD) after pointing out the 2-day surge in volume last Wednesday and Thursday, opened Friday on new lows and reversed. Textbook my friends! For this week, with an ensuing holiday, expect the S&P 500 to be range bound. Support around the 157.50 mark, resistance around the 161-162.00 area. Friday, the US market wakes up to the unemployment report.
S&P 500 (SPY) Subscribers: Pivots are negative making the bias to the downside unless it clears R1.
Russell 2000 (IWM) Confirmed to a bullish phase with 2 notable technical patterns. First, the high on Friday failed to fill the gap left from June 19th’s big reversal candle. 98.16 is that number to clear. Second, the 50 DMA at 96.50 becomes critical support. Subscribers: Pivots only slightly negative.
Dow (DIA) A perfect retracement to the 50 DMA and retreat on Friday. Could be the end of the dead cat bounce, could be more range bound as with SPY between 146.50 and 149 Subscribers:Pivots negative.
NASDAQ 100 (QQQ)What started out on Friday as weakest, had the best close. Therefore, look to this index for signs of strength Monday morning with the 50 DMA at 72.12 to clear and close above. Otherwise, 70.00 is the underlying support. Subscribers: Pivots slightly negative.
ETFs:
XLF (Financials)A couple of good aspects to this chart. One is the close over the 50 DMA and more importantly, the monthly uptrend held up after a huge decline. Subscribers: 19.20 is key support and would consider following a move over Friday’s highs.
SMH (Semiconductors) Interesting bullish engulfing pattern with a strong close ended the week. 37.70 is the 50 DMA to clear once and for all. 37.15 good gauge of support. Subscribers: Eyes here on the financials
XRT (Retail) Another group in good shape. 76.00 key support and if can fill and hold the gap over 77.85, very strong Subscribers: Another group to watch.
IYT (Transportation) 108.20-108.65 an area to hold. And, the 50 DMA is the area to clear
IBB (Biotechnology) 170 has to hold and eventually, 176 to clear
IYR (Real Estate)Here’s where we have to watch to see if the prospect of tapering by the FED can be absorbed without too much further damage. A good start would be a move over the 200 DMA
XHB (Homebuilders) 29.29 is a key area of support to hold if this has a shot of gaining traction. Therefore, another area besides real estate looking more vulnerable for the short to intermediate term
GLDVolume, volume, volume. 2 days worth before putting in a bottoming pattern on Friday-again with huge volume. Subscribers: Also held the 80 monthly moving average. I expect more bounce from here with first level of resistance 125. Support now 116.
USO (US Oil Fund)Could not fill the gap from the island top. A bit volatile here but maintaining the bullish phase
OIH (Oil Services)New month, new eyes to watch 43.80 the 80 monthly moving average
XLE (Energy) 80.80 is ultimately the point to clear. Otherwise, still looks vulnerable
XOP (Oil and Gas Exploration) Aside here for now
TBT (Ultrashort Lehman 20+ Year Treasuries) 3 day fairly significant correction, with 71.55 the gap low place to watch for a hold
UUP (Dollar Bull) 22.42 is place to hold. Cleared back over the 200 weekly moving average as well.
SGG (Sugar) Although the stop was hit late day Friday, if this maintains itself over 57.50, I will continue to watch it for a change to recovery phase
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 caneither 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)
AMZN Inside day. Although it made a slingshot high June 19th, remains one of the strongest retail stocks. More miniswing trade if can hold 276 and clear 280.20
M Smaller retail stock with slightly negative pivots but held S1 now the tightest risk at 47.78. Through Friday’s high, could see recent highs 50.00 or higher
CREE 64.75 has to clear to negate the slingshot high but for now, 62.50 is good support to buy against
C Also has slightly negative pivots but after a slingshot low from6/24 at 45.06. Makes this one to watch over Friday’s high in the financial sector
MBI Although pivots are negative, putting this as a category 3 because of Friday’s late day run. 12.83 is the low to hold for now. 13.20 a swing number and over 13.52, R1, a good sign of strength to 14-14.50
LNC After a weak start Friday, closed well. 36.50 now point to clear-Here is one you almost have to risk to under 34.00 for a swing and put it away now that it is over the 80 monthly.
CBI Slightly negative pivots so has to clear R1 and Friday’s high to keep going. Took home ½ position with risk under the 50 DMA 58.50 for swing.
FDX Also negative pivots for one day (Friday’s weak close) but if can hold 98.00 a good place to look for a swing especially if can clear 99.25
Category 4: (Rip Tide) N/A
Phase Change: N/A
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
OXY Returned to unconfirmed warning pause with tight risk to 90.27 Friday’s high. Has support at 87.50, but if that breaks, see the 200 DMA next
SPG 161.14 is the 200 DMA resistance. On the weekly chart, broke the 65 weekly moving average second week in a row and reversing a trend that goes back to 2009. Next support is 148.00
SLB Not oversold and still weak looking especially under 70.00 Keeping this on for swing with risk over R2 working out well
CNQ Back on list. 28.66 resistance. Had a possible slingshot low at 27., but if breaks could see 24.00
CTXS 61.03 good risk. If stays weak, could see 50.00
Bye for Now!
