Happily, the Russell 2000s closed above the 50 DMA for an unconfirmed bullish phase. Marginally. We are also now looking to see if the interest rates might get a bit of a pullback-will the TLTs break 114.60 area?
We did see Semiconductors fall hard today. Seems possible that money will begin to rotate more into thefinancial sector (XLF) especially since they have been consolidating since early June. 23.07 is the 2014 high to clear.
NASDAQ made it to new 14 year highs again while S&P 500 made it to new highs. The Dow held near-term support at 170.45 so no damage done there.
Very satisfying to see the Retail sector hold up while the Homebuilders confirmed the bull phase. Of course, in the rotation game, Solars fell hard and Regional Banks can’t seem to get arrested.
All in all, a digestion day with the aforementioned rotations notable. A few months ago, I wrote about some positive impacts that could occur if the China ETF firmed along with a bottoming US dollar which confirmed an improved accumulation phase.
Companies using foreign goods such as Wal-Mart might benefit as they buy goods in China and sell them in the US. Also, we can begin to look for a narrowing trade-deficit if Chinese exports get cheaper for American consumers. All of this could mean stronger financials, higher dollar, firmer rates, and better retail resultsfor the second half of the year.
S&P 500 (SPY) 197.85 important support Subscribers: Positive Pivots in all but DIA
Russell 2000 (IWM) Crossed the 50 DMA and needs to do it again to confirm. Likewise, over 115.25 much better
Dow (DIA) 170.00 good place to hold
Nasdaq (QQQ) Strong and getting into overbought territory
XLF (Financials) Cleared 22.95 and looks poised
SMH (Semiconductors) A rough day here
IYT (Transportation) A move one would expect after 2 Inside days
IBB (Biotechnology) 260 resistance to clear
XRT (Retail) Over 85.15 will look a lot better
IYR (Real Estate) 73.00 pivotal
ITB (US Home Construction) Much better
GLD If world events remain status quo, still see this as negative longer term
USO (US Oil Fund) Unconfirmed bullish phase again which would like to see confirm this time
TBT (Ultrashort Lehman 20+ Year Treasuries) 58.11 recent lows twice this week
UUP (Dollar Bull) confirmed accumulation phase
JO (Coffee) Subscribers: Tried but failed to close above the 50 DMA-will keep watching
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 *
CYH Reports 7/31. Inside day. Over 46.00 looks good with 44.50 area good support
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)
*HUN Reports before open 7/30 Closed ok and merits another day on the list with 27.20 good risk
Category 4: (Rip Tide) N/A
Phase Change:
AXL Reports 8/1 Before open. Inside day on the 10 DMA and over 20.00 like with risk to around 19.49
WMT Reports 8/14 76.80 pivotal and over 77.10 better-would trade this more for a miniswing here
SFY Reports 7/31 before open. Dropped to the 200 DMA and moved back up so now needs to clear R1 12.48 which gives a decent hybrid swing risk to 12.13
AFL Reports 7/29 63.85 has to clear and could have some fun if it does for a miniswing
EL Reports 8/15 Inside day now needs to clear 76.36 and hold todays low
*CREE Reports 8/12. We are out but closed right on support which means worth watching over R1
ODP Reports 8/5 before open 5.35 the 50 DMAShorts:
**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
DE Reports 8/13 before open Broke the 200 DMA and now 88.20 resistance with recent lows 87.17 to break
RIG Reports 8/6 43.04 breaks S1 with resistance at 43.50
AOL Reports 8/6 Under 38.02 takes out the 50 DMA with support around 36.50
Category 6: White Cap-N/A
