We started last week focused on the small caps and we ended last week equally focused there. Our friendRussell, made quite a splash with lots of overhead to clear should the ignition continue.
I really like when an instrument (IWM) finds steam and ends well. Shakespeare might say, "All’s Well That Ends Well” And so I salute the small caps-almost as exciting as the World Cup!
NASDAQ had an inside day after making new highs, but with a more sobering chart formation. The high momentum stocks live here and a market without their participation-well, it just ain’t as much fun.
Last week’s fun clearly took place in commodities. Gold, Silver, Oil, Sugar, Corn and Coffee awoke from a long hibernation (Coffee did have a spectacular run early on this year to be clear).
Solar energy made our portfolio sing last week!
With all the good news about new highs, etc.-my conservative tendency is to find the troubling spots and ponder their relative weakness.
Are we heading towards inflation? Long Bond prices firmed marginally over the course of the week but Junk Debt hit new highs, meaning junk yields dropped sharply. The US dollar did not clear the 200 DMA, however pulled back to a good support level after its run from the island bottom. Inflation erodes buying power and with the FED still printing money, essentially that will decrease the value of the dollar or YOUR purchasing power. All of the aforementioned definitely relates to the Gold explosion last week!
Keep eyes on the Financial, Retail and Homebuilder sectors. All closed red on Friday with the new highs in the Dow. Keep eyes on the dollar and rates as well. The commodities are one piece of a puzzle, these all have their place in that jigsaw as well.
S&P 500 Looks like a healthy rest (SPY) Subscribers: Positive Pivots in all except QQQ
Russell 2000 (IWM) Nice close for the week-look forward to see what happens Monday.
Dow (DIA) Very close to new highs again-trouble happens under 168
Nasdaq (QQQ) Inside day
XLF (Financials) 2 Inside days and for us, a technical dream.
KRE (Regional Banks) 40.76 to clear for this to join in and an inside day
SMH (Semiconductors) Sitting on the dock of the bay
IYT (Transportation) Healthy action
IBB (Biotechnology) Got that gap over 250 I told you about-great move on Friday-see 270 in the cards
XRT (Retail) Concerning unless it clears the March highs 87.53
ITB (US Home Construction) Like this over 24.25- on a closing basis
GLD No surprise to see an inside day after Thursday’s move
USO (US Oil Fund) New 2014 highs
OIH (Oil Services) Boing!
XLE (Energy) Overbought but amazing
XOP (Oil and Gas Exploration) Also amazing
FCG (First Trust ISE Reserve NatGas) This too
TAN (Guggenheim Solar Energy) Love child of SMH and XLE for sure Subscribers: TAN Daytrade add still a big potential for Monday
PHO (Power Shares Water Resources) 27.23 2014 high
TBT (Ultrashort Lehman 20+ Year Treasuries) TLT Challenging that 50 DMA but technically in a confirmed warning phase
EWW (Mexico) Subscribers: Inside day and poised for a move up especially since it cleared the 23 monthly moving average-risk around 67.07
FXI (China Large Cap Fund) 2 inside days
CORN (Corn) Subscribers: Looking at Monday here for confirmation
SGG (Sugar) Subscribers: Gorgeous close over the weekly channel, but just shy of the 200 DMA so looking fresh next week
JO (Coffee) Subscribers: Confirmed slingshot-good place to look 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:
PANW If Friday’s low holds, like over R1-has room
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)
GOOG Good close again on Friday and now like over 558 for a miniswing trade risk
VMC Inside day like the low of Friday as risk and if good lots of potential
TSLA Inside day and some consolidation, like for a miniswing trade over 235.30 risk Friday low
FSLR Inside day and like over 70.00 risk minsiwng trade-cleared the 200 weekly moving average
IPG Inside day but also has a bullish engulfing pattern and over the 10 DMA. Risk good for miniswing trade
GT An ORR would be nice but since it cleared 27.70 looks poised to 28.48 or better
YUM Inside day and really good setup for all time frames
Category 4: (Rip Tide) N/A
Phase Change:
CYH Big move Friday and like on an ORR or extension of move over 45.26
DDD 3 shooting stars to end last week-over 54.90 like with risk to 52.75
YOKU over 22.00 worth buying with stop under the low of that day if goes for a swing as it looks like its bottoming out
SFM Over 31.48 R1 for an add
CIEN Watch for this to clear once and for all (22.85)-again if does, risk to the low of the day-inside day too
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ALK If doesn’t clear today’s high then has a possible bear flag forming-good for Miniswng
AAPL A classic example of not sticking to the plan and I don’t mind admitting it since it’s a good lesson all around. Now, if negative, Monday fresh look.
Category 6: White Cap-N/A
Bye For Now!
