Welcome to the continuation of the pre-Federal Reserve Meeting Week! After Monday’s action which began by exhibiting characteristics of a split personality, Tuesday the patient clearly visited a therapist and found some sanity with rates dropping some and the market running up another 138 points. Seems more obvious that the anticipation is for the FED to keep juicing. The volume today was less than on Monday. The daily chart patterns on the indexes crossed from the middle of the recent range into the top half of the range. The S&P 500 has more substantially cleared the 50 Daily Moving Average. The small caps are very close to the recent highs. Even AAPL-the new counter mover, closed red! All good in the bull hood, at least for now.
S&P 500 (SPY) Cleared 165.40 first hurdle. Now has to hold really 164.50 to gain momentum for taking out the May 22nd highs Subscribers: positive pivots
Russell 2000 (IWM) Cleared 98.80 to be the best performer. Close to the recent highs 100.38. Like when small caps are boldly present.
Dow (DIA) Cleared 152.88 today and now 151.25 is the new low to defend
NASDAQ 100 (QQQ) Could not clear 73.76, the same area that the other 3 did clear (high from June 10th). 2013 began with the leaders leading. AAPL is one major reason for that. But, if the rally is fueled by stimulus that is a practical reason why leaders may not be as responsive
ETFs:
GLD 135 resistance with 130 a very substantial area of support-with sentiment still bearish and looking more so now
XLF (Financials) Took all day to get through 19.83 and closed and 19.86. Like the QQQ, not over the 6/10 high.
IBB (Biotechnology) Back to an Unconfirmed bullish phase-and with an inside day.
SMH (Semiconductors) How many of my loyal readers still do not know how much I love this group?Subscribers: Back at looking at 39.00
XRT (Retail) 78.82 next hurdle but good looking group
IYT (Transportation) Much better if today’s low holds up
IYR (Real Estate) Still uncomfortably close to the 200 DMA-and first place to look for shorts if market rolls over
USO (US Oil Fund) Top of a 2 and ½ month base. 35.00 will be interesting to watch
OIH (Oil Services) Since middle 2011, been forming a pretty good base, but still very much inside of it
XLE (Energy) Into June 10th resistance-good test to see what happens from here Subscribers: 81.68 the June 10th high
TBT (Ultrashort Lehman 20+ Year Treasuries) The reversal candle from June 11th is towering above. But, there is support below as well
XOP (Oil and Gas Exploration) 61.73 the June 10th high
XHB (Homebuilders) Good example of a recovery from the 50 DMA
SGG (Sugar) Subscribers: Seems the most logical thing to wait for is a clearance of the 50 DMA
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
**NOTE: GE WOWZER! 24.14 was the 2013 high-should hold there now.
HLX Next time we write “Coiled like a spring”, we should all pay attention. Up 4% today and now more of an ORR candidate
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:
GCI 3 inside days after the gap higher. 24.00 the obvious risk and over today’s high better-also note that this is over the 80 monthly this month
Category 2: (Pipeline) N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can eitherbuy 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)
PFG Crossed the 80 monthly moving average last month. Cannot break S1 and has to clear 39.05
FDX Compressing over the 10 DMA. Like to see today’s low hold
MBI 13.82 after an inside day is place to clear. Then, there is a trendline from the highs over 14.00. We can even look at 13.60 a good tight risk, even for a swing
PNC One of my favorite stocks to trade. Now, 2 inside days in the financial sector-worth watching over today’s highs and R1
MET Above the compression area at 45.15. If stays above, still in play
JWN Now, like to see it hold 59.20 S1. But if market stays firm, this has room to the upside
BXP Testing our patience, but at least we are in the money using now the 50 DMA as risk. See another 4.00 here if market holds
GD Needs to close over 79.00 to see higher levels
Category 4: (Rip Tide)N/A
Phase Change:
KFN Setting up especially if can clear 10.90 now
PM Inside day. Another one testing patience but holding well after slingshot with lots of room if clears 93.00
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AAPL Today’s high good risk and under Friday’s low 428.50 looks weaker
Category 6: N/A
Bye for Now!
