Salome’s Maybe, Maybe Not, Last Dance
Salome is often depicted as an icon of dangerous female seductiveness, notably in regard to erotic dance.
Her famous dance is called the Dance of the Seven Veils.
I write about the Economic Modern Family comprising of 6 (IWM, XRT, IYT, SMH, KRE, IBB), and have lately added Greece through the ETF GREK as Cousin Eddie borrowing from the Griswold Family in the National Lampoon Vacation series, hence making it a total of 7!
Therefore, as we follow them through their trials and tribulations, Wednesday Salome showed up as the seductive NASDAQ, seducing the family by flirting with, but not quite taking out, the 2015 highs of 111.16.
Salome’s dance veiled the rally for all 7 of the Economic Modern Family.
Veiled, but ended?
Not so fast. Looking back at Tuesday’s commentary and Nash’s Theory of Equilibrium, if the market is trying to predict an outcome of the current hot beds-Greece, Interest Rates, Economic Growth both in the US and globally, etc., and its impact on the market, most likely it cannot.
Why do I parallel this theory to the market? Simple-some call it a sling blade, I call it a Trading Range.
The Trading Range has prevented both the bulls and the bears from receiving a higher payoff. Of course, the bulls and the bears have their obvious preference of outcome of the market action. The point is the outcomes, while the market is in this range, are equally unknown.
Granddad Russell 2000 and Prodigal Son Regional Banks held well near the recent highs. Grandma Retail keeps hope alive above 100.00. Semiconductors andBiotechnology, although always positive when they move up as it’s a good sign of speculative activity, really just need to hold up. Both did above the 50 DMA.
Cousin Eddie (GREK) corrected yet also held the 50 DMA.
Transportation sadly, wound up like the head of John the Baptist- served to Salome on a silver platter.
Bulls hope that NASDAQ does not wind up like Salome did, voluntarily beheaded. Although QQQs outperformed the S&P 500, Russell’s and the Dow on an intraday level, until the QQQs either clear 111.16 or fail 109.00, our Family should remain in equilibrium with the weaker members battling it out with the stronger ones.
S&P 500 (SPY) Unconfirmed phase change back to warning. Again. 209.50 support, 210.85 pivotal and over 211.61 good again Subscribers: Negative pivots in all
Russell 2000 (IWM) How many times have I written possible reversal top only to see it hold and turn back around.
Dow (DIA) Unconfirmed warning phase unless clears back over 180.30
Nasdaq (QQQ) Until we get a decent clearance over 111.16, lots of range bound noise
XLF (Financials) 24.65 support to hold
KRE (Regional Banks) Possible top but not counting on it with the low volume
SMH (Semiconductors) Over 58.47 better but for now, we at least want to see this hold 57.10
IYT (Transportation) 148.12 recent lows
IBB (Biotechnology) Yet another low volume possible topping candle
XRT (Retail) Holding 100
IYR (Real Estate) Buckling regardless of the rates as of Wednesday action
XHB (US HomeBuilders) 36.98 is the highest weekly close since 2007- but for Wednesday overbought and possible reversal candle
GLD (Gold Trust) Typical lack of follow through type action since April
USO (US Oil Fund) Noisy until it clears 21.50 or fails 19.00
XOP (Oil and Gas Exploration) Did not confirm the reversal from the 60+ day lows
TAN (Guggenheim Solar Energy) If holds 42.00 good and over 43.50 even better
TLT (iShares 20+ Year Treasuries) 115.26 the 6/10 low and over 117.20 clears
UUP (Dollar Bull) Back up near the 50 DMA resistance after holding the 200 DMA support
GREK (Greece) If this holds now over 11.34 seems 13.00 will be the next hurdle
EWP (Spain) *Subscribers: 35.48 if holds will still consider a long back over 35.81
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
***Market Tone: Short-term Negative 6, Intermediate-Term Positive 2, andLong-Term Positive 8. NOTE: Market Tone is updated before the open each day and changes in real time throughout the day.
*All starred picks are from the automated list of picks (which now includes short picks!)
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:
*GLPI Like if holds 37.07 and clears pivots at 37.40 then R1 at today’s highs for swing 5-30 min OR
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:
*TXT If holds 45.40 like for mini to swing ½ over 45.90and ½ over 46.11-5-30 minute OR
*LLY 3 days under pivots. Like risk to under 82.02 and has to clear 82.55 for ½ then today’s high for the other ½ swing or mini 5-30 min OR
Category 3: N/A
Category 4: (Rip Tide) N/A
Phase Change:
*NFX Phase change unconfirmed to bullish. Over 38.00 looks good with risk to 37.20 near today’s low for a mini to swing –any OR
Reversal Trades: (Glass or Brick Wall Bottom or Top): N/A
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
LMT If holds under the 200 DMA at 190.67 can see more downside. Day to mini Any OR
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s low
*HAL If breaks S1 like risk to 44.67 for a mini to swing trade-5-30 min OR
*TS Under S1 with risk to 28.48 for day to mini 5-30 min OR
Best Best wishes for your trading,
Michele Schneider
