This week’s evening watches will be prepared by Matt Mullins. Michelle Schneider will return on July 7.
We may have already seen the fireworks, as we head into the Fourth of July holiday. After all four of the major indexes made new all-time highs on Tuesday, they spent Wednesday digesting the impressive moves up. The S&P 500 (SPY) and the Dow (DIA) both closed with inside days. That is when the range of the day is within the range of the prior day. Tomorrow may bring more of the same digestion, as volume will likely be light as we move into the Holiday weekend. The jobless claims come out tomorrow at 8:30 EST and could move the market. I expect most of the action to happen early.
The New York Stock Exchange (NYSE) will close early at 1:00 EST and the SIFMA bond market will close at 2:00 (EST).
S&P 500 (SPY) Inside day aty the highs. The direction of the range break will be a good indicator to Friday’s overall move. Subscribers: Positive pivots in SPY, DIA and QQQ. Negative in IWM.
Russell 2000 (IWM) Watch 118.91 as potential support.
Dow (DIA) Inside day
Nasdaq (QQQ) New all-time high and all-time high close- again! Getting extended and has a high RSI. More digestion likely.
XLF (Financials) Inside day.This looks explosive over 23.00.
KRE (Regional Banks) Inside day on the 10 DMA. Needs to clear 41.00.
SMH (Semiconductors) Confirmed the runaway gap and another all time high close.
IYT (Transportation) Inside day.
IBB (Biotechnology) Breaking out of compression.
XRT (Retail) Possible slingshot high today.
IYR (Real Estate)
ITB (US Home Construction) Inside day. 25.27 is the next resistance.
GLD Compressing.
Metals and Mining (XME)
USO (US Oil Fund) Closed the gap. One of the weakest sectors.
XLE (Energy) Compressed.
TAN (Guggenheim Solar Energy) Love this longer term. 44.78 needs to clear. Compressing.
TBT (Ultrashort Lehman 20+ Year Treasuries) TLT Filled a gap on the daily chart-now if it starts to roll over, would be interested in looking at a short. TLT now in an unconfirmed warning phase.
UUP (Dollar Bull) Inside day.
EWG (Germany) Nearing 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)N/A
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)
ADBE Inside day. Watch for a breakout over today’s high.
JNJ 2 inside day. Watch for a breakout over yesterday’s high.
LNKD Watch for a breakout over recent highs.
AXP Very compressed and can be explosive over recent highs.
EW Watch for a breakout over 88.19.
LPX Inside day. Watch for a breakout over today’s high.
EMN Inside day on the 10 DMA. 87.50 must hold.
UNH Watch for a breakout over 82.54.
Category 4: (Rip Tide) N/A
Phase Change:.
MA Now in a confirmed Accumulation Phase. Watch for a breakout or ORR against the 200 DMA.
Bye For Now!
