The information I wrote last night concerning buying dips with certain confirmations in place, I hope was useful in tracking the small caps or Russell 2000s during Tuesday’s session. If nothing else, it might have prevented you from selling on the open and actually looking at the possible buy opportunity.
With that said, this market as I also wrote about, has been tough to navigate because of so manyconflicting factors-to name a few:
The US dollar has risen to a 6-month high. China, although a bit overdone now, has performed incredibly well. Interest rates are at a 2014 low.
And by the way, with all the noise, IWM (Russell 2000s) confirmed the distribution phase-weakness and caution prevail!
S&P 500 (SPY) Under 196.50 expect to see the 50 DMA at 195 area Subscribers: Positive Pivots in all except SPY
Russell 2000 (IWM) 112.20 the low to break with a move over 114 a giant relief for a start
Dow (DIA) Next visit to the 50 DMA will most likely pierce it
Nasdaq (QQQ) Still sideways and best bet especially with the strong Twitter after hours move on earnings
XLF (Financials) 22.65 the 50 DMA
KRE (Regional Banks) Not ready yet. Inside day
SMH (Semiconductors) May have to fail the 50 DMA next time and see how it acts around 48.40
IYT (Transportation) Dropped to the 50 DMA
IBB (Biotechnology) A good performer on a down day
IYR (Real Estate) 73.00 pivotal and can also be seen now as resistance with the inside day
ITB (US Home Construction) 22.58 the 2014 low
Metals and Mining (XME) Doji day and probably one to watch
USO (US Oil Fund) Subscribers: 37.54 R1 and if clears would consider buying back the 1/2
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs no stopping this with FOMC tomorrow
UUP (Dollar Bull) New 6-month highs
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 * Also not including anything that reports within 3-4 days of writing list
*PANW Reports 8/27 A good one to watch on a 5 min and 30 min with an inside day if clears R1
FB Nugget with 3 days under pivots which means has to clear R1 74.55 for a miniswing risk
Category 2: (Pipeline) N/A
Category 3: (Double Up) N/A
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:
*KMX Oversold and down 7 days now close to the 50 DMA 48.60 max risk if clears R1 50.01
Phase Change:
LGF Day to swing depending on risk setup-over 32.30 looks good to 33.60 last swing high and perhaps beyond
*PM In with a wide risk so will see what its made of
*FSLR Reports 8/6 Inside day over the 50 DMA with risk 64.85
Shorts:
**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
ACT Reports 8/5 Broke the 50 DMA now has to break 213
TRIP Reported under S1 98.45 looks weak with risk to 100.45
Category 6: White Cap-N/A
