If I had to come up with a specific diagnose for Wall Street using some the categories setup by the Department of Education for classifying “special needs” children, it would be Other Health Impaired or Attention Deficit Disorder.
I mean come on market-how else do you describe the high volume down day with so many sectorsdisintegrating into negative phases one day, followed by a decent volume rally with most (not all) of those same instruments improving in phases the next day?
Let’s go to my favorite indicators. The small caps (Russell 2000s). Last Wednesday and Thursday they went from bullish, to warning to distribution (price under the 200 DMA.) Friday, they returned to the warning phase (price back over the 200 DMA but still under the 50 DMA). Therefore, a really good place to look come Monday morning.
Semiconductors. Last Wednesday they made new multiyear highs. Then on Thursday they put in a powerfulreversal pattern with high volume. Friday, however, they whimpered with an inside day-indecisive but better.
20 Year Treasury Bonds. After last Thursday’s gap up (although not to new highs), Friday ended with an inside day. Seems 115 and above could spell trouble for the market while a break of 113.82 might be perceived as a sign of relief for the market (Ritalin if you will!)
The Dow definitely wanted to prove it could close above 17,000 and it did. DIA had an inside day. NASDAQdid better and actually is the brightest spot since the move back up last Friday happened with substantial volume. The S&P 500 also had an inside day and remains well positioned for Monday.
To me, QQQ and IWM are most interesting-who leads, who follows. Interest Rates a close second withSemiconductors coming up on the rear.
On a separate note, here’s to the plethora of world crises calming down.
S&P 500 (SPY) 197 once again a pivotal area. Subscribers: Positive Pivots in all
Russell 2000 (IWM) Unconfirmed Warning Phase. Watch this for a breakout over the 50 DMA or another breakdown under the 200 DMA.
Dow (DIA) Inside day
Nasdaq (QQQ) 96.30 high from last Wednesday
XLF (Financials) Inside day
KRE (Regional Banks) Sign of weakness with this remaining under the 200 DMA with an inside day
SMH (Semiconductors) Inside day under the fast moving average
IYT (Transportation) Inside day
IBB (Biotechnology) Right back over the 50 DMA but with lots of overhead resistance making this a good place to look for shorts if market weakens
XRT (Retail) Unconfirmed bullish phase-impressive
IYR (Real Estate) Our ETF sector model took a profit here Friday up 25%!
ITB (US Home Construction) Also a concern with an inside day under the 200 DMA
GLD I will note the island top that has not been negated. I will also note that this sector is very hard to trade if looking for follow through
USO (US Oil Fund) Inside day under the 50 DMA
OIH (Oil Services) Not that impressive as some of the other strong groups considering
XLE (Energy) Not that impressive as some of the other strong groups considering this has been a leader
TAN (Guggenheim Solar Energy) Unconfirmed return to bullish looking for a confirm to enter
UUP (Dollar Bull) 21.52 the 2090 DMA to clear
EWN (Netherlands) Subscribers: Have this here because it had a slingshot low which if confirms (24.69 R1) looks good with a risk to 24.28 the 65 week moving average-thin
JO (Coffee) Subscribers: Watching the 50 DMA
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) 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:
*NOTE: If the risk to the 50 or 200 DMA is more than 1-2ATRS of risk, assume that the trade is a miniswing trade. Swing denoted with a *
BAX Reported. 75.50 max risk. Over R1 76.86 looks good to new highs
QCOR Reports 7/28. For a miniswing trade like if holds 94.00 and clears 95.40 R1
*XOM Reports 7/31 before open Like the return over the 10 DMA. Max risk 101.90 (the 50 DMA) and needs to clear R1 103.17
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)
LAMR Reports 8/7 before open. Found this one since had double the average volume on Friday and an inside day. 52.67 good risk with 53.24 a place to clear
SPWR Reports 7/31. Like for a miniswing trade over 39.20 with risk 38.25
GT Reports 7/30 Has to clear R1 now 28.03 and would do as a hybrid swing with risk 27.40
*TSLA Reports 8/6 221 is the 10 DMA to clear with risk around S2 (50 DMA) for a swing
CSC 63.25 support. Looking for a move to hold though over 64
Category 4: (Rip Tide) N/A
Phase Change:
*EL Reports 8/15 Crossed the 50 DMA with 75 good risk and over 76.23 good point to clear
ODP Reports 8/5 before open One to put away for your grandkids provided it holds 4.95 with the first cross over the 80 month moving average since 2008.
*PRGO Reports 8/6 before open Like if holds 148 (220 DMA) and clears 155.55
*PM Reported-waiting for the 50 DMA to cross and confirm the bull phase
DDD Reports 7/31. Good move Friday looking for follow through over the 10 DMA 57.55 risk 56.00
X Reports 7/29. Like this better now on an ORR
*WMT Converging moving averages and now looking for follow through against the 200 DMA
Shorts:
**NOTE: Thinking that we should use daytrading risks on shorts and only carry overnight if closes in our favor-while market in bull phase
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
OXY Reports 7/31 Didn’t confirm the warning phase and now in an unconfirmed bull phase-we kept ½ since never cleared R1-therefore expect stop around 101.48 Monday
*RIG Reports 8/6. 43.50 max resistance(50 DMA) with a break of 42.72 good to follow
Category 6: White Cap-N/A
