Has it really come to this? The market drops 130 or so on Monday but the feeling is bullish for the next day. The next day the market rallies 100 and the feeling is back to cautious. As you might already know, I am no fan of hackneyed phrases even when they are the practical term, but “Dead Cat Bounce” sure seems apropos. The S&P 500 had a doji day (Japanese candlestick term meaning the opening and closing price is exactly or really close to the same). This infers indecision. Volumefor the first time in the last 4 trading sessions was below the daily average-not encouraging on the green day. The phases in all indexes remain in warning. One positive note is that the warning phasehas changed from accelerated to weak. Therefore, best case, the indexes continue to rally with thesmall caps (Russell 2000) leading the charge back to an unconfirmed bullish phase. Fair to middling case-the dead cat bounce continues to the 50 DMA and stops there. Worse case-one day wonder-back to the correction on Wednesday.
S&P 500 (SPY) If this holds Tuesday’s low, then a further bounce at least to the 50 DMA is likely. But, if Tuesday’s low breaks, then would anticipate more selling with the 200 DMA a magnet.Subscribers: Pivots in all indexes are positively stacked
Russell 2000 (IWM) 96.10 is the 50 DMA to clear and clear sooner rather than later or Tuesday’s low becomes vulnerable.
Dow (DIA) 146 giving this some support and only a move over 150 or so would be encouraging
NASDAQ 100 (QQQ) Would consider 70.00 pivotal here-like it above, not so much below, with support levels on the way down-69.00, 68.00-especially 68.00 where the 200 DMA lives
ETFs:
XLF (Financials) For Wednesday 19.27 is the 50 DMA to clear to keep this positive. For the month, a close over 19.20 is key
SMH (Semiconductors) 37.60 is important on a lot of levels-it keeps the recent channel breakout on the monthly charts intact and it crosses the 50 DMA. So, if this cannot get and stay there-like the whole market, vulnerable
XRT (Retail) The first number to watch to clear is 75.70-the 50 DMA. Otherwise, joins the rest in looking like more downside in the cards
IYT (Transportation) Here, 108 is the important pivotal number. Then 112 on the upside and 102 on the downside
IBB (Biotechnology) Under Tuesday’s low, vulnerable as well.
IYR (Real Estate) This has to clear the 200 DMA again or under 63.00, 60.00 is next
XHB (Homebuilders) Under 28.00 next time, see 26.00. Otherwise, this has to clear 29.50
GLD 115 the eventual target
USO (US Oil Fund) Confirmed accumulation phase. Small long miniswing position against the 50 and 200 DMAs-which means has to hold 33.49
OIH (Oil Services) Until this closes a month out over 43.80, not really all that interesting to me
XOP (Oil and Gas Exploration) Under the 200 DMA could see 55.00. A weekly close over 59.00 much more encouraging
TBT (Ultrashort Lehman 20+ Year Treasuries) Stopped out no loss stop on balance of the TLT long from Tuesday. The primary trend in the TBTs is up with today an inside day.
UUP (Dollar Bull) Could not clear the 50 DMA but getting close.
SGG (Sugar) The futures cleared the 50 DMA but not this. We bought ½ position until it does.
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) N/A
Category 2: (Pipeline) N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means caneither 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)
YELP Although it didn’t do much, over the 10 DMA for a condition improvement and still in gear if 30.50 holds
LNC Improved in condition. Has to hold 35.25 and clear 36 then the highs
GCI The stop will be under S2 tomorrow. And, like to see this finally clear the sharply rising 10 DMA for a continuation move
SPLK Aside here after an inside day unless this clears 44.40, Tuesday’s high
CBI Pointed out in today’s video. If holds 58.10 the 50 DMA and it can clear today’s high, like this one for a move to 64.00 or beyond
MET Holding the 80 monthly moving average. Improved in condition. Risk is today’s low and has to clear today’s high
Category 4: (Rip Tide)N/A
Phase Change:
CRM Will most likely raise the stop to under S2 from the slingshot low if the market weakens. Otherwise, if it can pop over 39.00, will look really good
WMT Inside day. That means has to clear 74.80 and hold 73.44 the 200 DMA
MBI Inside day under the 50 DMA which it absolutely has to clear.
GE Although this tried to clear 23.20, it closed just shy but back in an unconfirmed bullish phase. Like over 23.20
P Now, an ORR is preferred
OSK Going to consider 35.00 the number to hold as the slingshot confirms. 36.00 would be a good place for this to clear
Shorts: Even though the market seems vulnerable, the stocks that have been already beaten up have really oversold RSIs on the weekly charts and are more setup for max, a daytrade.
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
SLB Now, not quite a whitecap, but with positive pivots, has to break S1.
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 lows
DLR Classic whitecap and has to break S1 Resistance 58.60
Bye for Now!
