Perhaps the market overdosed on Ritalin this weekend since the focus during Monday’s tight range with 3 out of the 4 indices putting in inside days (when the range of the day trades within the range of the day prior) and with the S&P 500 posting a rare 2 inside days, seems uncanny!
Jokes aside and examining my favorite indicators, here’s how we sit heading into Tuesday, bucket loads full of earnings and some key economic numbers on tap.
The Russell 2000s held the 200 DMA but could not cross the 50 DMA confirming the warning phase with aninside day. Definitely a place to watch for range break and next direction. Semiconductors were stronger, clearing the 10 DMA and 50.55 swing area. Now, they need to clear 50.86. The 20 year long treasury bonds, took out the April 2013 high and closed near the intraday low. If they gap lower, perception will be better. Otherwise, they continue to spell warning.
S&P 500 (SPY) 2Inside days-follow the range break as high percentage trade Subscribers: Negative Pivots in all but QQQs
Russell 2000 (IWM) Confirmed Warning Phase. Inside day wedged between the 50 and 200 DMAs.
Dow (DIA) Held the fast moving average
Nasdaq (QQQ) 96.30 high from last Wednesdaywith an inside day to start this week
XLF (Financials) 2 inside days-tomorrow should be fun
KRE (Regional Banks) 39.25 is what has to clear now
SMH (Semiconductors) Over the fast moving average
IYT (Transportation) 2 Inside days here too
IBB (Biotechnology) Confirmed phase change to bullish if holds 246.35
XRT (Retail) Inside day and confirmed warning phase
IYR (Real Estate) Inside day
GLD island top that has not been negated.
USO (US Oil Fund) Unconfirmed bullish phase
TAN (Guggenheim Solar Energy) Confirmed return to bullish phase
TBT (Ultrashort Lehman 20+ Year Treasuries) Of course eyes here
UUP (Dollar Bull) 21.52 the 200 DMA to clear
EWW (Mexico) Subscribers: Inside day near the highs
JO (Coffee) Subscribers: Watching the 50 DMA at 34.00
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 76.38 looks good to new highs
QCOR Reports 7/28. For a miniswing trade like if holds 94.00 and clears 95.07 R1
CYH Reports 7/31. 43.90 max risk with 45.60 R1 to clear for a mini to hybrid
JPM Reported-another fave-2 inside days and a miniswing risk to how it sets up if clears 58.46 R1
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)
*XOM Reports 7/31 before open Tried to breakout but never closed over R1-now like the risk to the 50 DMA 101.93 and over 103.49 R1 looks good
SPWR Reports 7/31. At this point, has to get over 39.33 and hold with miniswing risk
*TSLA Reports 8/6 Never had a 30 min close over R1 which is at 223.49 tomorrow with a good risk 214.07
Category 4: (Rip Tide) N/A
Phase Change:
*EL Reports 8/15 Inside day on the 50 DMA-fave for tomorrow over 76.08
*CREE Reports 8/12. After testing the 50 DMA, now in a good recovery phase with max risk 48.30
ODP Reports 8/5 before open Has to clear R1 5.13 and hold 5.00
*PM Reported-waiting for the 50 DMA to cross and confirm the bull phase-in the meantime, 2 inside days with a good risk to 84.80
X Reports 7/29. S1 is key and with positive pivots still has a short over 27.35
Shorts: N/A
**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-N/A
Category 6: White Cap-N/A
