Even The Devil’s Grandma Was Nice When She Was Young
Retail Sales for May climbed with an upward revision for April’s number or what The Wall Street Journal’s online publication called, “U.S. Shoppers Go on Buying Binge”.
Binge might be a tad strong but as one who loves poetic license, I will grant them that. Grandma Retail or XRT, as far as equities go, has my full attention. In Wednesday’s daily I wrote,
“XRT tried to clear the 50 DMA and did so barely. With this sector a huge component of the US GDP, the case for continuation of the current trading range increases. After all, this sector measures the state or at least the perceived state of the economy perhaps like none other.”
The Retail Sector is my anointed Granny of the Economic Modern Family. In cases where parents are unwilling or unable to provide adequate care for their children, grandparents often take on the role of primary caregivers. Hence, the Russell 2000s as Granddad and Retail as Grandma.
From a technical standpoint, XRT has to bust out over 100.00 or fail miserably under 96.00 to break the month and half trading range. A move over 100.00, especially as the week draws to an end, just might give Granddad the impetus to climb over its recent highs, 127.00.
I oversimplify the complexities of the market, but not really. Sometimes, especially in a market governed by facts and opinions communicated in nanoseconds, all it takes is a cohesive perception to grease the wheels.
Concerning the Interest Rates as the “Producer” of the market living in the artificial and idyllic Truman-like dome, the TLTs or 20+ Year Long Bonds might have had a strong reversal off of the 2015 lows made on Wednesday. Cueing the sun to come up worked for now!
S&P 500 (SPY) Confirmed return to a bullish phase which means 210.34 the 50 DMA pivotal Subscribers: Positive Pivots in all
Russell 2000 (IWM) 127 is the top of the range. Support now 124.41 the 50 DMA
Dow (DIA) Unconfirmed return to a bullish phase. Has to hold over 180.14
Nasdaq (QQQ) Confirmed return to a bullish phase. 108.60 the 50 DMA pivotal now. Over 110 better still
XLF (Financials) New 2015 highs and looks good for more still
KRE (Regional Banks) Inside day near the highs and a well-deserved rest
SMH (Semiconductors) Has to clear 58.00 and hold 56.75
IYT (Transportation) All about the weekly close-if over 152.10 very healthy sign
IBB (Biotechnology) Made it over 368.
IYR (Real Estate) Over 74.00 better
GLD (Gold Trust) A close over 114 will get us interested
USO (US Oil Fund) Digested the move with 21.50 the big area to clear
TAN (Guggenheim Solar Energy) The gift of trading down to 40.00 so far, a gift.
EEM (Emerging Markets) Possible reversal in the works
EWP (Spain) Subscribers-note this in the list for your watch
EWI (Italy) Over 16.00 looks great
DBC (DB Commodity Index) Has to close over 18.00
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
***Market Tone: Short-term Positive 1, Intermediate-Term Positive 4, andLong-Term Positive 9. NOTE: Market Tone is updated before the open each day and changes in real time throughout the day.
*All starred picks are from the automated list of picks
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:
*M if holds 68.46 and clears all-time high is 70.00 who knows? Mini to Swing-over R1 could do ½ position to see if clear 70.00 can then add
Category 2:N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy an 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)
*XRT Closest risk 98.50 and has to clear over 100 Swing Any OR
RCL Inside day. Over 77.99 like with risk to 75.28 for swing trade. Any OR
MYL 73.47 good risk with a move over R1 or really 74.41 a good place to clear. Mini to swing
CMC Inside day. Been trading in a box with today’s move over the 50 DMA compelling as risk to today’s low. Over 17.00 breaks the box. Swing Any OR
*SGEN Like for day to mini against the 10 DMA 45.80 Any OR
Category 4: N/A
Phase Change:
*EWP Unconfirmed phase change to recovery. Like best over 36.18 but would try over the 35.67 on any OR. Swing risk to 34.36
SODA Flagging with positive pivots. Like over R1 21.73 with mini risk since it has to clear the 200 DMA or gone
Reversal Trades: N/A
Shorts:
Category 5: N/A
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
