One could argue both sides for whether or not last week’s action and especially the digestion on Friday was bullish or negative (won’t use the word bearishwhen the phase is bullish).
The S&P 500 closed out the week hovering on the fast moving average, with an inside day and down from the peak and prior week’s high.
Does that leave us moonstruck? I wrote last week about the rarity of a Friday the 13th and a full moon occurring simultaneously, but that was more for entertainment.
Writing as a professional technical analyst, I rather comment that looking at theDow, which closed under the fast moving average, also with an inside day andNASDAQ, which closed above the 10 DMA, yet again, with an inside day, suggest that the correction may not be over. This conjecture also comes with consideration of a tenuous situation in Iraq.
Several flights to quality we saw last week, rates dropped, gold and oil rallied, are concerning. Other signs that if the Iraq situation stabilizes, market will resume its course higher after correcting about 50% in the SPY from peak high to gap low over a 14 day period, such as Semiconductors on new highs, Retail andFinancials holding.
I do like that the small caps closed just slightly under the close of the week prior-115.59 versus 115.88. One little push and the Russells could alleviate any anxiety from those who witnessed a wicked witch riding on her broomstick across the diameter of a full moon.
S&P 500 (SPY) Held 193.50 as a 50% retracement and with an inside day over 194.80 back in the saddle Subscribers: Neutral Pivots in IWM, Positive in SPY QQQ, Slightly Negative in DIA
Russell 2000 (IWM) Over 115.91 good under Friday’s low, worrisome
Dow (DIA) Inside day and most troubling with its position under the fast moving average
Nasdaq (QQQ) Inside day on the fast moving average. 92.79 will bring relief
XLF (Financials) Held support and now has to clear 22.75
SMH (Semiconductors) INTC clearly helped an already amazing sector
IYT (Transportation) Inside day and precarious at best unless really moves up Monday-here is a warning
IBB (Biotechnology) Over 250 next stop around 270
XRT (Retail) Still not in a bullish phase. But, at least holding above the key moving averages which it has to continue to do
IYR (Real Estate) Fairly significant correction but still very much in a bullish phase
ITB (US Home Construction) In a bull phase but weakened considerably. Now, has to hold Friday’s low
GLD 123.07 resistance which if clears looks like it will follow SLV which took out the 50 DMA
USO (US Oil Fund) Iraq gave this a big push which is not overall good for the market-ultimately not good for the market.
OIH (Oil Services) Very strong finish-looks higher
XLE (Energy) New highs again
XOP (Oil and Gas Exploration) Wrote that this was ready for new highs over 78
FCG (First Trust ISE Reserve NatGas) New 2014 highs
TAN (Guggenheim Solar Energy) Confirmed a bullish phase and looks like it’s just getting going Subscribers: One we can consider adding to
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Back over the 50 DMA-bullish phase again
PHO (Power Shares Water Resources) 27.23 2014 high Subscribers: Inside Day. Now if holds 26.50 good place to risk against for a starter position then an add on new highs
FXI (China Large Cap Fund) New 2014 highs-now it gets interestingSubscribers: If this gets going, good time to watch commodities that China consumes like URA
CORN (Corn) Subscribers: Confirmed the slingshot low and now has to clear the 10 DMA
BAL (Cotton) Subscribers: Also interesting to watch here
JO (Coffee) Subscribers: Small position and now, has to hold the 10 DMA 33.30
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:
COF Still in play if holds Fridays low and clears R1
CAM A move and close over 65.50 and this clears months of work with upside potential
ALL Inside day improvement in condition to a 1 over the 10 DMA-now if clears R1 59.16 looks good for a hybrid swing
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:
PM In a tight consolidation for a new leg up if clear 88.80
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)
ADSK Needs to clear R1 54.54 and hold Friday’s low
ETR Over R1 78.60 risk to Thursdays low good one in the energy group for a swing, especially over the 80 monthly moving average
TEVA In the biotech space my favorite. Over R1 52.22 is good over 52.37 even better risk now for swing under the 50 DMA 50.72
SPWR Over the neckline of a huge head and shoulders bottom, measures a 10.00 move up-or over Friday’s high with a risk between a mini and a swing
Category 4: (Rip Tide) N/A
**SFM Confirmed huge island bottom, this is the best one I have seen in 4 years since WY made one in 2010! Over the 50 DMA will look at a buy and hold position. Over 30.74 will risk to under Friday low a perfect 1.5 ATRs
CIEN over the 200 DMA or 22.82 is a good entry point with stop under whatever the low is Monday if it clears
TWTR over 37.27 clears a gap left from early May and with a lot of call buyers around, worth watching for a move to 50 risk under 35
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AAPL Watched it go south Friday and now would like to see an OR high failure against the 10 DMA
QCOM Inside day under the 50 DMA and a great risk to around Friday’s high. As a semiconductor, not following the others so could be in trouble
WFM Could be the end of the line here against the 50 DMA. Like under S1 or on an OR high failure
Category 6: White Cap-N/A
Bye For Now!
