The World Is More Interesting With You In It
Hannibal Lecter
Let’s just say I would not recommend a lunch date with Hannibal Lecter just yet, considering the lambs may have abated their screaming, but they have not been let loose in the pasture.
Not surprising to see some relief during Tuesday’s session considering the 350 point drop on Monday. The operative word here is “some” as the indices tried hard but could not do much more than that-try.
Looking at the Family-my rudder all year, the Russell 2000 closed just around the 50 Daily Moving Average to at least give us a reason to show up one more day before we US traders say, “Heck, let’s start the July 4th weekend early!”
Retail looks more disappointing, confirming a warning phase unable to hold above its 50 DMA. Regional Banks held 44.00, and with rates firming a bit again, could return to rallying, especially if it clears 44.75. Otherwise, under 44.00 see a move down to its 50 DMA.
Semiconductors traded inside the trading range of Monday and returned back over the 200 DMA-promise there. Biotechnology even better, had an inside day over the 50 DMA.
Leaving our family underdog for last, Transportation also had an inside day however, with virtually no signs of a reversal pattern or huge volume therefore, unless that happens during Wednesday’s session, it could be looking at 143.50 next, a significant area of support on the monthly chart.
Greece (GREK) on the other hand, does have a probable reversal pattern in play if confirms. Huge volume, and a close in the top part of the intraday range. Although the lambs are not too happy about this, the Shepherd surely knows that if you want the best lamb meat, head to your local Greek Restaurant for a delicious Gyro.
On another note, I have been talking about the basing action in Commodities, especially the soft ones, for some time now. Tuesday the agricultural index soared, with Corn rising over 6%. Commodities direction reflects supply/demand. And regardless of anything else going on in the world or with FED policy, like our sheep, we all gotta eat!
S&P 500 (SPY) Holding the 200 DMA which of course it has to continue to do and rally from or more downside in store Subscribers: Negative pivots in all
Russell 2000 (IWM) Inside day and did manage to get back to an Unconfirmed Bullish Phase
Dow (DIA) With 2 days of huge volume, I am more thinking blow off in the works and will look for confirmation of that over the 200 DMA
Nasdaq (QQQ) Inside day with a move over 108 good if happens
XLF (Financials) 24.15 support with an inside day
KRE (Regional Banks) 44.00 area support then 42.85 and back over 45 a much better scenario
SMH (Semiconductors) Inside day above the 200 DMA
IBB (Biotechnology) Inside day on the 50 DMA
XRT (Retail) Wednesday is key for this to hold or could see lower prices quickly
IYR (Real Estate) Touched major monthly chart support
XHB (US HomeBuilders) Inside day above the 50 DMA
GLD (Gold Trust) No noteworthy action
USO (US Oil Fund) Noisy until it clears 21.50 or fails 19.00
UNG (US NatGas Fund) Like over 13.67
TAN (Guggenheim Solar Energy) Inside day-over 40.00 gets interesting
TLT (iShares 20+ Year Treasuries) 119 has been recent resistance that has to clear
UUP (Dollar Bull) If clears the 50 DMA resistance could see more upside
EEM (Emerging Markets) Interesting pattern in some emerging markets in spite of a stronger US dollar
CORN (Corn) Last time this was over the 200 DMA was April 2014-cleared there Tuesday
BAL (Cotton) Great basing action
SGG (Sugar) Trying to base
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 Negative 2, Intermediate-Term Negative 2, andLong-Term Positive 2. 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: N/A
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:
*HUM 188.00 max risk at the 50 DMA. Needs to clear pivots first then R1
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)
*GERN Great volume and best risk 4.10 now. Any OR
*LNC If holds today’s lows, and clears 59.88 R1 could be a resumption of the move higher in a regional bank stock. Any OR
*TASR Max risk 31.00 but can also use 31.61 today’s low since it had a phase change. Any OR to see if it can clear back over the 10 DMA at 33.80
AVGO Inside day on the 50 DMA which means can use a good risk under 131.04 and has to clear R1 even with the positive pivots or over today’s highs
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:
CIEN Oversold. The 50 DMA is 23.50. Has to clear 23.95
ABBV Today’s lows are max risk on the 50 DMA. Has to clear 68.00
Phase Change:
*AWAY We sold at 31.20 so over today’s high will put us back in with a stop under 30.00 or about 2 ATRs. Any OR
Reversal Trades: (Glass or Brick Wall Bottom or Top):
INTC Possible reversal which means has to clear 30.69 and R1 with the stop under the 80 month moving average 29.80.
MPEL Huge volume, big range, island bottom potential. Risk 18.40 with a move over the 50 DMA good to see if this continues
Shorts: Focus List since most good for daytrades: DFS AXP AMGN AMP
Category 5: N/A
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
