Wednesday night, I wrote about IBM the Dow and how while IBM was breaking a key moving average, the Dow climbed to new highs yet looked somewhat precarious as of the close. The advice, in case there was something to that, was to watch NASDAQ going into Thursday. I even further suggested that the breakaway gap ended in SPY on Wednesday as well.
Now, let’s examine another rarity and possible polarizing relationship-Friday the 13th and the full moonoccurring simultaneously. Last time that happened was October 13th, 2000. If you look at the monthly chart, there was a long tail on the monthly candle as the price began with a hard fall, then rallied back to close higher than September 2000. But, thereafter, after a couple of fits and starts, the market did indeed rollover, droppingnearly 25% until a climactic low occurred during October 2003.
Scary? Not one iota of information substantiates the relationship as fact. However, market dynamics dictated by human psychology-another story. Who needs facts when you have people “behaving” out of fear or anxiety?
One thing is for certain, low volume selloffs just as low volume rallies may not be the most reliable indicator to follow. Markets generally need volume/power to sustain a move. However, the market can surely go south because of a lack of buying as well once whatever meager buying has dried up.
With market uncertainty, the last 2 trading days have definitely put a bullet hole in the bull.
Next date for the full moon and Friday the 13th to occur is August 13th 2049. We get through whatever is in store for us now, then we can all howl at the moon for the next 35 years.
S&P 500 (SPY) Although the gap from May 27th is still there, today a lot of damage officially stops the count of days over the breakaway gap and now, we look at 193.50 as a 50% retracement to hold or not Subscribers: Negative Pivots in all
Russell 2000 (IWM) Actually held up the bet so a move over 115.91 will look better and under 114.30 not so much
Dow (DIA) No more gaps here and a reason to support more correction here
Nasdaq (QQQ) Marginally holding the 10 DMA if can stay here-otherwise, damage done
XLF (Financials) Tested that level of support at 22.50-lets see if it holds
KRE (Regional Banks) gradual correction which is encouraging
SMH (Semiconductors) Emerald City still with no wicked witch in sight
IYT (Transportation) That’s a breakdown and suggests selling into rallies
IBB (Biotechnology) Over 250 next stop around 270
XRT (Retail) Hasn’t had the same muster as some of the other groups so could be a drag if cannot hold around 84
IYR (Real Estate) Fairly significant correction unless it clears back over 71.90
ITB (US Home Construction) Not pretty
GLD 123.07 resistance which if clears looks like it will follow SLV which took out the 50 DMA
USO (US Oil Fund) Iraq giving this a big push which is not overall good for the market
XLE (Energy) Possible topping candle if confirms
FCG (First Trust ISE Reserve NatGas) New 2014 highs
TAN (Guggenheim Solar Energy) Busted out of 7 days of compression
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Back over the 50 DMA-been a tough game trading rates-I gave up a while back
PHO (Power Shares Water Resources) 27.23 2014 high
UUP (Dollar Bull) War drum affected this from clearing the 200 DMA
CORN (Corn) Subscribers: Back where we originally got long so will keep an eye on it-possible brick wall
JO (Coffee) Subscribers: Could be interesting over 34.00 for a starter position
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:
ADSK If today’s low holds, then like a lot over R1 54.28 for a hybrid swing
COF Inside day and risk to 80.15 with move over R1 and today’s high lining up
CAM A move and close over 65.60 and this clears months of work with upside potential
OC Inside day on the 10 DMA which means have to wait for it to clear R1 42.20 (today’s high) for a new swing
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)
INTC raised guidance after the close and rallied-last peak high was in May 2012 at 29.27-a gap above there and we should reenter with a new risk. Unfortunate I jumped the stop today, but go figure!
SPWR It did what it needed to do so now, either has to clear 35.90 or look for an ORR
CRK Tomorrow should be good here if this is good since good day, outperformed and now, so close to breaking out over 28.00. Will look at it for a day to miniswing trade
PM In a tight consolidation for a new leg up if clear 88.80 Miniswng trade now (pivots negative)
CVX Overbought now but that doesn’t mean it cant go up more for a day to miniswing trade
Category 4: (Rip Tide)N/A
Phase Change:
IGT Coiling and now risk 14.14 if clears 14.46 R1
SFM Potential huge island bottom if confirms by holding over 29.53 tomorrow. Then, we have to take a small position to see if it can clear the 50 DMA
CIEN over the 200 DMA or 22.82 is a good entry point with stop under whatever the low is tomorrow if it clears
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
DE Short now with wide stop looking for 200 DMA over time
ATI Inside day under the 50 DMA risk to over today’s high. Could see move to 39 or lower
CREE Slightly positive pivots so need to break S1 and not clear today’s high-long term charts weak
Bye For Now!
