If there were ever a time to throw in the towel, it sure looked that way last Friday. But, the phase, bulls, overall good earnings reports, lack of volume on the downside-maybe all of the above, wouldn’t hear of it! So, a grind upwards began after the market was down almost 150 points to end the week in the green. And there was a shift in leadership as well. Thanks to Amazon and Apple, NASDAQ closed above 75.00 while the Russell 2000 or small caps, although with an inside day (when the range of the day is inside the day prior) closed right on a pivotal support level, 104 and red. Of course, the market is still officially working off topping action from July 23 and 24th with those highs still in place. A gap higher could easily put an end to that. Otherwise, keep eyes on those small caps as a possible early warning sign.
S&P 500 (SPY)Calling 169 pivotal, over 169.70 healthy and under Friday’s low trouble. Subscribers: 4 days negative pivots so has to clear R1 which would be a good signal
Russell 2000 (IWM) Inside day. Has to clear recent highs still, holding the fast moving average and closed over the 104 pivotal area. Watch which way this goes as best clue Subscribers: Pivots negative
Dow (DIA)155.74 has to clear now, 155.14 the May 22nd high marginally held and like to see it hold Friday’s low Subscribers: Pivots Negative
NASDAQ 100 (QQQ) Crossed over 75.00 filling the gap left on 7/19. However, still needs to clear 75.74 to be clear of the topping action fomr 2 weeks ago. Subscribers: Pivots Positive
ETFs:
XLF (Financials)Ended the week lower from where it began after putting in a brick wall high midweek. So, unless this resurrects, have to continue caution on the long side, especially in this group
SMH (Semiconductors) Unconfirmed warning phase, which considering it crossed over the 50 DMA last Thursday and couldn’t hold there to end the week, not a great sign unless it gaps higher
XRT (Retail) Closed at the top of the channel and not above the high 81.55 which it must do to stay strong. But, right now, would say best chance of getting to those highs
IYT (Transportation) Holding the 50 DMA and could be forming a right shoulder for an inverted head and shoulders bottom.
IBB (Biotechnology) 196.97 has to clear but best action besides retail
IYR (Real Estate)Three lows last week at 67.53 which does seem a bit surreal. Some overhead resistance to clear before we can safely say that those were triple bottoms
XHB (Homebuilders) Inside day with a weak close and precisely why we are not raging bulls just yet
GLDConfirmed recovery phase Subscribers: Looks better over 129.57 r1
USO (US Oil Fund)36.88 gap low to defend or more downside
OIH (Oil Services) Subscribers: Got a few days left of the month to see if this closes above or below the 80 monthly moving average
XLE (Energy) 84.00 big number
XOP (Oil and Gas Exploration) 2 Inside days. Subscribers: Follow the range break here
TBT (Ultrashort Lehman 20+ Year Treasuries) Held the 10 DMA. Subscribers: Kept 1/4 position for swing
SGG (Sugar) I’m almost 100% certain this has bottomed and will be looking for an entry on Monday. 57.54 has to cross.
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:
WAG Held the 10 DMA and now best risk 50.40. Plus we can now get in over R1 51.23 which should take this to new multi-year highs.
GE Long ¾ position. Like that 24.45 is holding. Like to see this resume over R1 as this is also over the 80 monthly moving average
CSIQ If holds Friday’s low, like over R1 and Friday’s high to see if this time can make a new multi-year high
Category 2: (Pipeline)N/A
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)
MDVN Reports August 8th. Really has to clear all time high now but watch for a hold of the 10 DMA 56.16 as support
COF Has to clear R1 69.07 now then looks good especially since it never had a slingshot high. The 10 DMA or best risk 67.91
GS Inside day needs to clear 116 and hold 164.19 the 10 dma
KSS Reports August 8th. If holds 53.00 lvel and clears 54.00 should see more upside
P Inside day. Has to clear 18.95 and hold the 10 DMA 18.44
CLH Closed just over the trendline shown on videos. Now, prefer an opening range reversal to control risk
Category 4: (Rip Tide)N/A
Phase Change and/or Slingshot Lows:
AAPL began to pull away end of day Friday and now needs to clear R1.
CRM 2Inside days has to clear 43.63
ATI Held slingshot low and cleared the 50 DMA. If it can hold Friday’s low, then could see move to 200 DMA or higher
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IBM If cannot clear 198.10, then candidate for Opening Range High Failure. Plus if fails the 10 DMA 195.40, another sign of weakness
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s lows
LULU 70.41 Is max risk and with a white cap, has to fail Friday low
Bye for Now!
