Hardly the same drama as on May 22nd given the daily trading range or average daily volume, the S&P 500did indeed signal a possible new reversal candle by the close of Tuesday’s session. Same with the Russell 2000s, but not the Dow. The possible indication is when an instrument opens on new (or at least 60-day highs) and then proceeds to close in the bottom 25% of the intraday range. All signals whether they are possible reversals, phase changes, etc.-need another day to confirm. The Dow did not fit that pattern making it a bit of an iconoclast compared to the other indices. NASDAQ broke the gap low from July 11th already confirming a reversal pattern from its new highs made on July 17th. Gold continues to rock and roll with an unconfirmed improved phase change to recovery. And the US dollar continued its decline holding onto the 200 DMA by the skin of its teeth.
S&P 500 (SPY)Confirmation would look like a move under 169. Subscribers: Pivots Negative-SDS the ultrashort made a possible slingshot low-watch if this breaks down further
Russell 2000 (IWM) Confirmation on reversal if breaks and stays below 104. Runaway gap low 101.94 and most critical underlying number to hold now
Dow (DIA)155.14 the May 22nd high to fail if topping out. Otherwise, remained the strongest one on Tuesday
NASDAQ 100 (QQQ) AAPL at time of writing was up post earnings. As a big influence to this index, using same parameters 74.53 then 75 as range to break one way or another
ETFs:
XLF (Financials)Possible reversal candle that will require confirmation
SMH (Semiconductors) Indecisive here as it trades between the fast and the 50 DMA
XRT (Retail) A channel has formed from the trading range over the last 9 days. Watch which way it breaks
IBB (Biotechnology) Unlike the indexes, this did have a more concerning reversal candle as the range was substantial and the volume over the daily average. Under the fast moving average, could signal the start of a bigger correction
IYR (Real Estate)Converging moving averages which would like to see hold
XHB (Homebuilders) Inside day. Like to see 31.00 clear
GLDLots of folks fooled by this unbelievable move off the lows-not us! A classic example of a reversal candle or the opposite of what could be developing in the indices
USO (US Oil Fund)Unless this clears 38.50, still topping action that needs confirmation
XLE (Energy) Looks better if can clear 83.95
XOP (Oil and Gas Exploration) Made a new 2013 high by one tick and closed lower.
TBT (Ultrashort Lehman 20+ Year Treasuries) 74.60 would be the point to clear
UUP (Dollar Bull) The 200 DMA is 22.18-landed and closed there
SGG (Sugar) Subscribers: Through 57.50 a better call for some bottoming action
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:
SKS 2 inside days with a small range today we can use. Over Today’s high lines up with R1 and under today’s low is the 10 DMA or max risk 14.77
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:
FDO 67.05 low and good place to hold with R1 and today’s close to clear.. That would also clear the 10 DMA
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can eitherbuy 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)
LINTA Reports August 6th. Consolidating and breaks out over 24.73 and has to hold 24.27. Could see all-time high or higher made in 2007 25.89
ACAS Reports July 30th To control risk would only look at an opening range reversal
CSIQ Needs to hold 13.00 and clear the 2013 highs at 14.47. Next resistance is 16.00-17.00.
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:
GCI Inside day. Has to hold 25.19 and has to clear R1 and today’s high which line up. This is one we held until earnings, exited, but overall like because its over the 80 monthly moving average.
Phase Change:
GMCR Reports July 31st. If can hold today’s low, through 75.90, could see 78.30 next resistance.
BEAM Reports August 1st. Inside day and if can hold today’s low and really clear 66 to see push up to 68.00-69.00 ahead of report
CRM Reports August 19th. Over 43.00 should continue move to 47.00 or so
X Reports July 30th. 19.50 next hurdle and has to hold 18.95
MAS Reports July 29th 21.25 next hurdle and like to see it hold 20.75 S2
TOL Unconfirmed phase change to bullish. Needs to hold today’s low and is good for ORR or breakout if risk is in line. A lot depends on XHB
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
JOY Under 50 with risk to 50.80 could see further downside. 48.50 next level of support
DRI confirmed Distribution Phase with resistance 49.92 the 200 DMA. Has to break today’s low
Category 6: N/A
Bye for Now!
