I’m not so sure I would let a low volume, only slightly down session lull you if you are a committed bull into complacency after Monday’s session as there was some substantial deterioration if you look under the hood. First, examining the small caps (Russell 2000), which I wrote about after an inside day(when the range of the day is within the range of the day prior) to end last week as the best place to determine the tone was down .64% compared to the best performer, NASDAQ, which even with a healthy AAPL performance, still closed down .13%. Then, there are 2 significant phase changes for the worse-semiconductors, which confirmed a warning phase and real estate which went into an unconfirmed distribution phase. Rates climbed which appears to be saying the market is readying itself for the FED, who meet Wednesday, as no longer able or willing to keep the juice flowing. Now, keeping a balanced perspective, retail closed down marginally, which could mean the consumer confidence will prevent more deterioration or John Q. Public is late to the buying party.
S&P 500 (SPY)Inside day with Friday’s low 167.52 a key point to hold, with equal weight on a move back above 169 for the reverse case. Subscribers: 5 days negative pivots so has to clear R1 which would be a good signal
Russell 2000 (IWM) 101.94 is the gap low from 7/11 as the best support area with a move over today’s high encouraging. For now, the topping action of last week is in place Subscribers: Pivots negative
Dow (DIA)Inside day.155.74 ultimate price to clear and like to see it hold Friday’s low Subscribers:Pivots Positive
NASDAQ 100 (QQQ) Still needs to clear 75.74 to be clear of the topping action from 2 weeks ago.Subscribers: Pivots Positive
ETFs:
XLF (Financials)20.35 is the old 2013 high from the May 22nd top and now the support to hold
SMH (Semiconductors) Confirmed warning phase, with a monthly close at or over 37.50 important if this group is to stay at the higher 2013 levels
XRT (Retail) Best chance to take leadership especially over81.55
IYT (Transportation) Holding the 50 DMA but had damage today as one of the works performers of the major sectors and groups
IBB (Biotechnology) Holding the fast moving average but 196.97 has to clear now for this to resume momentum
IYR (Real Estate)After3 lows last week at 67.53, it took that level out by just a couple of ticks, but more importantly went into an unconfirmed distribution phase, breaking the 200 DMA
XHB (Homebuilders) Unless this gets back above 30.00, looks like it too can visit the 200 DMA
GLDInside day in the improved recovery phase Subscribers: Looks better over Friday’s high stop below the 50 DMA
USO (US Oil Fund)Inside day. 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
TBT (Ultrashort Lehman 20+ Year Treasuries) Showing signs of higher rates in the cards Subscribers: Kept 1/4 position for swing
EWG (Germany) Inside day and holding the 50 DMA
SGG (Sugar) Subscribers: I guess saying I was almost 100% certain this had bottomed was correct. Now, unconfirmed phase change to recovery. Look for a dip to 58.32 the 50 DMA
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:
Post Earnings: X-through 19.70 looks like it will tackle the 200 DMA and perhaps beyond
WAG Held the 10 DMA and now best risk 50.40. We kept 1/2 position on the opening range reversal. Like that R1 and today’s high line up for an add
GE Long ¾ position. Holding the 10 DMA now the risk. Will also be ok with an add over R1
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. Inside day.Really has to clear all time high now however, watch for a hold of the 10 DMA 56.12 as support and a cross over Friday’s high as first entry
DOW 34.50 max risk and looks like over today’s highs could see 36.25 and beyond
OI Improved in condition and must hold today’s low. 30.00 recnt highs to clear
COF Slightly negative pivots. Inside day. Has to clear R1 68.78 now then looks good especially since it never had a slingshot high. The 10 DMA or best risk 67.91
KSS Reports August 8th. Narrow range and holding the 10 DMA 53.21 so far. If clears 54.00 should see more upside
Category 4: (Rip Tide) N/A
Phase Change and/or Slingshot Lows:
AAPL Now, an opening range reversal only
CRM has to clear 43.53
ATI Inside day and has to hold today’s low Held slingshot low and cleared Then could see move to 200 DMA or higher
Shorts: May be the most shorts we have had on list in some time
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IBM Took home a short position with 198 good risk level. if fails the 10 DMA 195.64, another sign of weakness
AXP Unconfirmed warning phase with max risk today’s high and has to break today’s low
SPG Has the 200 DMA underneath, but overall, looks weak and toppy
DIS Has this on the list last week and now again. But has to break today’s low and S1
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 70.37 is max risk and with a white cap, has to fail S1
EL Under S1 breaks today’s low and max risk at R1
JOY Today’s high max risk and has to break S1
Bye for Now!
