Prepared by Matt Mullins, MarketGauge Trader, filling in for Mish for Until Monday.
Hi ~Contact.FirstName~
After yesterday’s impressive rally over the 10 DMA in three of the four major indices, Friday was spent digesting these higher levels. The 50 day simple moving averages in every major index are sloping up, and thus far have proven to be supportive. However, all four indexes were unable to hold the 10 day simple moving averages and closed below. Also, still nagging the indexes are the slingshot highs from May 22nd. So, we have support below and pressure above, and that is leading to compression along the 50 DMA. The longer this compression lasts, the more forceful the move either way when the compression breaks. Whether that is a breakout over the 10 DMA or a break under the 50 DMA, that remains to be seen.
Pull backs in the market like the ones we've had over the last 3 weeks create big opportunities for swing traders! When the market picks its next direction there will be some very nice trend trades to catch. But we're not just waiting around idly, Many of our picks have moved up nicely, and are very well positioned for bigger moves such as YELP, BSX, and BXP!.
S&P 500 (SPY) Closed under the 10 DMA. Held the 50 DMA both times it tested this month. Subscribers: 162.7 area support, positive pivots.
Russell 2000 (IWM) Inside day. Needs to clear 98.70. Subscribers: Positive pivots.
Dow (DIA) Closed under the 10 DMA. Holding the 50 DMA. Subscribers: Only index with negative pivots.
NASDAQ 100 (QQQ) Inside day, under the 10 DMA. Subscribers: Needs to clear 72.92. Slightly positive pivots.
ETFs:
GLD 135 resistance with 130 a very substantial area of support-with sentiment still bearish unless it gets back over the 50 DMA. Positive pivots.
XLF (Financials) Holding the 80 monthly moving average. Inside day, needs to clear 19.83.
IBB (Biotechnology) Wedged between the 10 DMA and the 50 DMA, which is sloping up and is good support.
SMH (Semiconductors) Between an upward sloping 50 and a downward sloping 10 DMA. Needs to clear 38.44.
XRT (Retail) Closed above the 10 DMA. Looks poised.
IYT (Transportation) Held the 10 DMA and needs to clear 114.02.
IYR (Real Estate) Climbed back over the 200 DMA into a confirmed warning phase. Also confirmed a slingshot low. 200 DMA good support.
USO (US Oil Fund) Gapped higher from the converging moving averages and had a doji day.
OIH (Oil Services) Closed under the 50 DMA, bringing this into an unconfirmed warning phase. This looks like it can go either way.
XLE (Energy) Inside day. Closed between the 10 and 50 DMA. Needs to clear 80.90.
TBT (Ultrashort Lehman 20+ Year Treasuries) Closed under the 10 DMA. Holding 68.00 area. Under the 23 monthly.
XOP (Oil and Gas Exploration) Held the 50 DMA, closed under the 10 DMA.
XHB (Homebuilders) Confirmed bullish phase and had a doji day.
UUP (Dollar Bull) Very oversold with an inside day. Subscribers: On sights for a reversal over the 200 DMA possibly-aside though now
SGG (Sugar) Subscribers: Seems to have bottomed, big eyes here on Monday!
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:
WLL Great risk on daily, weekly and monthly charts. ORR against the converging moving averages preferred. Must be above 47.50.
HLX Coiled like a spring on converging moving averages and recently crossed the 80 monthly. Needs to clear R1 and Friday’s high.
JWN Inside Day. Needs to clear Friday high and hold Friday low.
UA 2 inside days, holding the 50! Needs to clear Friday’s high and R1, which line up.
PFG Crossed the 80 monthly moving average last month. Cannot break S1 and clear today’s high.
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:
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 Just broke a trendline and cleared the 80 monthly. Needs to hold Friday low.
AVB Sitting on the converging 10, 50 and 200 DMAs. Great support. Should clear Friday high.
AMZN Needs to clear Friday’s high. Risk to the 10 DMA.
BXP Converging moving averages, needs to clear 111.32.
GD Held the 10 DMA, looks compressed. Recent move off of the 80 monthly. Tight risk under 77.71.
BSX Good ORR candidate over 9.45, with good max risk to under 9.30 which is the 10 DMA.
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
Phase Change:
KFN Confirmed Bullish phase. Just cleared the 80 monthly.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CLF Looks very heavy. Needs to break Friday low.
AEM Needs to break Friday low.
AAPL Also needs to break Friday low.
Category 6: N/A
This weekend’s evening watch prepared by Matt Mullins. Mish will be back on Monday.
