This week’s evening watches will be prepared by Matt Mullins. Michelle Schneider will return on July 7.
The S&P 500 (SPY), Nasdaq (QQQ) and the Russell 2000 (IWM) once again made new all-time highs, and posted new all-time high closes. The markets were in part fueled by Friday’s positive jobs number. The US economy created 288,000 new jobs last month and the unemployment is down to 6.1% (almost a six year low). SPY and DIA have potential runaway gaps. IWM has an inside day. Pay close attention to which way IWM’s range breaks on Monday. It will likely be an indicator for the direction the other indexes will move on Monday. The market is very bullish, but short term digestion or even a correction will not be surprising as the market continues to climb.
Have a Happy Fourth of July Holiday! Mish will be back on Monday.
S&P 500 (SPY) It made a new all-rime high on Thursday. Gapped higher to form a potential runaway gap. Subscribers: Positive pivots in all indexes.
Russell 2000 (IWM) Inside day.Watch 118.91 as potential support.
Dow (DIA) Possible runaway gap.
Nasdaq (QQQ) New all-time high and all-time high close- again!
XLF (Financials) Beginning to clear recent highs. 23.00 is potential support.
KRE (Regional Banks) 41.30 is the next hurdle.
SMH (Semiconductors) Confirmed the runaway gap and another all time high close. Wow!
IYT (Transportation) Looks string over 148.78
IBB (Biotechnology) Breaking out of compression but getting extended.
XRT (Retail) 88.95 is potential resistance.
IYR (Real Estate) Watch to see if the 50 DMA holds as support.
ITB (US Home Construction) 2 Inside days! 25.27 is the next resistance.
GLD Sideways digestion.
USO (US Oil Fund) Closed the gap. One of the weakest sectors. It looks like it may touch the 50 DMA.
OIH (Oil Services) Needs to clear 58.01.
XLE (Energy) Compressed.
TAN (Guggenheim Solar Energy) Love this longer term. 44.78 needs to clear. Compressing.
TBT (Ultrashort Lehman 20+ Year Treasuries) Now in a confirmed Recovery Phase. 63.92 needs to clear.
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)
JNJ Very compressed. Looks explosive over R1 and Thursday’s high.
LNKD Watch for a breakout over recent highs.
AXP Very compressed and can be explosive over 96.24.
EW Watch for a breakout over 88.19.
UNH Watch for a breakout over 83.32.
BIIB Watch for a breakout or ORR over Thursday’s high.
XRX Watch for a breakout or ORR against the upward sloping 50 DMA.
GOOG Inside day. Watch for a breakout over Wednesday’s high. Thursday’s low must hold.
FCS Watch for a breakout or ORR against the 10 DMA.
Category 4: (Rip Tide) N/A
Phase Change:.
WLT Watch for a breakout or ORR against the 50 DMA.
KSU In an unconfirmed Accumulation phase. Watch for a breakout or ORR against the 200 DMA.
Shorts:
Hard to find shorts in a market like this!
Bye For Now!
