If the top of range in the S&P 500 this week is the 50 DMA, (162.50) then it stands to reason that 157.00-158.00 area should be the bottom of that range, provided that SPY does not gap above 50 DMA on the now infamous turnaround Tuesday. Only, not sure about this Tuesday given it can turnaround either way if range bound. And, with the July 4th holiday even closer, unless something dramatic happens out of the political situation in Egypt (a definite wild card), no reason to think new highs or new lows. One noteworthy comment below-the Russell 2000s. Friday’s jobs reportcould be the game changer one way or another, especially given that the long bonds firmed somewhat and nearly put in an inside day (traded within the range of Friday but took out Friday’s high by 2 ticks closing just shy of it).
(SPY) Subscribers: Pivots Positive in all indexes
Russell 2000 (IWM) Best looking index for sure as it not only is holding the bullish phase, but filled the gap from June 19th’s nasty candle and closed above. So, as much as the range bound theory is logical, this index could carry the rest of the market if stays firm
Dow (DIA) Could also be more range bound between 146.50 and 150, but not counting anything out.
NASDAQ 100 (QQQ)Not only do SPY, DIA and QQQ have to clear the 50 DMA like their sister IWM did, but they also have to fill the gap from June 19th just like their sister also did
ETFs:
XLF (Financials)19.20 is a key point here. 19.50 pivotal and 20.00 a great breakout
SMH (Semiconductors) Like IWM, has to not only clear the 50 DMA, but fill the gap from June 19th. Meanwhile, 37.50 pivotal
XRT (Retail) In good shape. 76.00 key support and if can fill and hold the gap over 77.85, very strong
IYT (Transportation) 108.20-108.65 an area to hold. And, the 50 DMA is the area to clear
IBB (Biotechnology) Big winner today. Has a gravestone doji candle to watch here making the 50 DMA important support
IYR (Real Estate)Here is why I go back and forth on the bullish bias. Even with some relief in rates, this remains under the 200 DMA and close red. Let’s see what happens at 65.00
GLDThere is a gap to 122.88 to fill as first target. Then, if keeps going, still can visit 130. Otherwise, support at 119.00
USO (US Oil Fund)No more island top after today, that gap was filled. Of course, any Middle East disruptions and this could fly. In a bullish phase
TBT (Ultrashort Lehman 20+ Year Treasuries) Watch TLT which still has a slingshot in play
UUP (Dollar Bull) 22.42 is place to hold.
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
**NOTE: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.
**NOTE: We purposely did not chase strength today which means several of the picks sold off from highs and could set up again tomorrow.
Category 1: (Aloha) N/A
Category 2: (Pipeline) N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means caneither 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)
M Now, 47.40 is a good risk. Not a bad candidate for an opening range reversal if holds support and market comes in weaker
DDD 44.00 is support and through45.56, looks like it will clear the recent activity. Near term, has to clear recent highs
GMCR Had a condition change. 75.68 today’s low a tight risk with lots of upside potential
CREE Never setup today, but still very much a contender for a run if the market stays firm-looking at 68 or better and has to hold today’s low
GCI Been sitting long for awhile. Now, starting to pull away from the 10 DMA. Look for an opening range reversal to control risk
CHKP Inside day. Risk Friday’s low 49.34. has to clear 50.75 both the highs and R1 looking for new highs with resistance around 53.00
MBI Broke the flag but never had a 30 minute opening range breakout. 13.00 is big support and 13.28 the 50 DMA closer support
CBI Today’s low is the new risk. Still see potential to 64.00 for now
Category 4: (Rip Tide)N/A
Phase Change:
C Has to clear the 50 DMA and hold 47.89
Shorts: Even though the market seems vulnerable, the stocks that have been already beaten up have really oversold RSIs on the weekly charts and are more setup for max, a daytrade.
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
SPG 161.14 is the 200 DMA resistance. On the weekly chart, broke the 65 weekly moving average second week in a row and reversing a trend that goes back to 2009. Next support is 148.00
LEN In a small short position. Resistance 36.50 area and could see move to recent lows 33.50 and possibly 25.00
BIDU 94.60 resistance with 89.00 recent support
DLR 61.25 now resistance with 55.00 recent lows as support
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
CHRW Back on list. S1 and today’s low line up and the 50 DMA 57.38 the resistance for a swing
Bye for Now!
