From the low print last Thursday morning to the close last Friday, market recovered 2.7%. The Dow did not quite make it to new highs for the week. Moreover, the nasty reversal candles from May 22nd loom overhead like a Temple of Doom. However, the market is intimating that rates can go up (albeit slowly and methodically we hope), the Federal Reserve can grind down Quantitative Easing (again slowly and methodically) and the slow but steady improvement in certain areas of the economy is more credible. Be that as it may, from the day of the runaway gap until the peak in late May, the volume was super light. Last week, with 200 point swings both up and down, the last 3 trading days brought higher than average volume back!
S&P 500 (SPY) 165.10 was last week’s high which now is the first place to clear. Then, 168 and finally the high high 169.07. Otherwise, a gap lower than Friday’s low and this all could have been a Friday dream. Subscribers: Positive Pivots in all
Russell 2000 (IWM) Friday’s action did not come close to the weekly high made of 99.20. First place to clear provided this does not break 97.00
Dow (DIA) Best news-in last 2 weeks this had 4 accumulation days in volume. Short-term indicators have gone back to positive while intermediate term remains negative and longer term neutral.
NASDAQ 100 (QQQ) Again, could not clear the high tick from last week with only 2 accumulation days in volume over the last 2 weeks. Either has some catching up to do or, telling us to remain somewhat cautious as we head into this week
ETFs:
GLD I patiently waited for the short opportunity and got paid off last Friday with the gap lower and subsequent close on the lows. 135 resistance with 130 a very substantial area of support
XLF (Financials) To me, it’s all about the 80 monthly trend reversal that confirmed in May
IBB (Biotechnology) Outperformed the market with some more work to do.
SMH (Semiconductors) Underperformed last Thursday and Friday, but holding the May lows and 38.00. Subscribers: 39.00 next key area to clear
XRT (Retail) Like this as long as it holds 78.00
IYT (Transportation) Back to an unconfirmed bullish phase
IYR (Real Estate) Marginally confirmed the reversal pattern from last Thursday. Marginally because this closed red. Subscribers: Really want to see this clear 69.11
USO (US Oil Fund) Confirmed phase change to accumulation. And handily cleared the week’s high Subscribers: Huge range on Friday.
OIH (Oil Services) Subscribers: Back over the 80 monthly moving average-watching to see if it can hold
TBT (Ultrashort Lehman 20+ Year Treasuries) 69.00 cleared with 69.69 the high of the recent move up.
XOP (Oil and Gas Exploration) Cleared the weekly high marginally-longer term still of interest
XHB (Homebuilders) Subscribers: Did better than the real estate ETF and cleared back over the 50 DMA. Like to see that hold
UUP (Dollar Bull) Subscribers: Inside day on the 200 DMA. Thinking back over 22.20 would give us a new low risk entry
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)
KSS Broke over the trendline coming down from the highs. 52.00 the next area to clear and 51.50 to hold
MTW Never broke the 50 DMA and holding on the 80 monthly moving average. 19.00 is the real swing support and now, like to see it clear the 10 DMA 20.15
LTD Inside day and really has to hold 50.50 clear 51.48.
CMI Improved in condition. 117.39 is Friday low and S1. And 119.50 next area of resistance to clear
GE Entry Friday for position trade. Now, 23.55 should hold with 24.14 the 2013 to clear. Could see 29.00 if the market doesn’t collapse
PRU Watch for an Opening Range Reversal now this did exactly what I thought it could do-making new 2013 highs.
YELP 29.00 now support with 30.55 next hurdle
BXP Sticking with this while it has the slingshot low, but cannot add now until 110-111 clears. Also, raising stop to 107.50 the 200 DMA
MET Looking now at 45.26 the 2013 high to clear and 44.25 to hold
BSX 9.20 key to cross with 9.00 support. Over the 80 monthly here too.
Category 4: (Rip Tide) N/A
Phase Change:
PM Confirmed the slingshot low and has to hold 92.00 most conservative risk
FDO Phase change to unconfirmed recover with the 200 DMA at 62.47 to clear, Friday’s low to hold
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
RDC 2 Inside days. 34.00 max risk with 33.80 the 200 DMA and 33.60 the 50 DMA. Needs to break S1 33.47
NFLX Underperformed with good risk to R1 220.04. Inside day too.
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
CNQ 29.41 good risk to R1 and Friday high and has to break S1.
