7 Rooms of Gloom
The Four Tops 1967
Wednesday night I mused on Salome’s Dance of the Seven Veils related to ourEconomic Modern Family (IWM, XRT, IYT, SMH, KRE, IBB), and Cousin Eddie (GREK)-seduction that ends with a beheading.
Tonight, in honor of NASDAQs Four Tops at 111.16, 111.08, 111.03 and 111.13 all posted since the end of April through June 24th, I place the Family in 7 Rooms of Gloom.
Ironically, GREK, the Greece ETF, held up the best of the bunch percentagewise intraday.
The Russell 2000 confirmed a topping candle yet has a lot of underlying support.Retail held 100.00 and needs to continue to do so, especially on a closing basis.
Regional Banks could be digesting by going sideways. Will keep eyes peeled on the 44.00 level as a good line in the sand of support. Biotechnology is having a more gentle correction while Semiconductors traded above the 50 DMA and inside the trading day of Wednesday.
Transportation, in the words of The Motown group’s song, “live with emptiness without your tenderness.”
Clearly, I utilize hyperbole since the song title doesn’t precisely fit all of our now expanded family members. Furthermore, there are positive signs with no reason to believe at this point, that the trading range is ready to reconcile either to the up or downside.
The final verse of 7 Rooms concludes optimistically:
Hence for Friday we sing,
“All the windows are painted black
And wait right here till you come back
I'll keep waiting, waiting
Till your face again I see
(Coming back
When are you coming back?)”
S&P 500 (SPY) Confirmed phase change to warning. 209.50 support, 210.80 pivotal and over 211.61 good again Subscribers: Negative pivots in all
Russell 2000 (IWM) Low volume reversal tops are suspect. This is holding the 10 DMA thus far at 127.31.
Dow (DIA) Confirmed warning phase. A while back I had a long with a stop at 177.07 that never got touched-no position now but watching that level with a move over 180.30 good
Nasdaq (QQQ) Until we get a decent clearance over 111.16, next support to hold is 109.70 then the 50 DMA
XLF (Financials) 24.65 support to hold
KRE (Regional Banks) Even in a dull weak tape, this held up well
SMH (Semiconductors) Inside day. Over 58.47 better but for now, we at least want to see this hold 57.10
IYT (Transportation) New lows for the year
IBB (Biotechnology) 373.35 is the fast moving average support should this turn around
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-
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
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 the weekly moving average
UUP (Dollar Bull) 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
CORN (Corn) This and the other soft commodities are still looking like basing action
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 Negative 1, andLong-Term Positive 6. 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 37.00 and clears today’s highs for swing 5-30 min OR
*ALKS 64.13 now good support wit a move over 65.47 the pivots then then 66.05 R1 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:
*FBHS If holds today’s low and clears 46.20 looks good for a swing to see if this can bust out of a yearlong consolidation
*YUM If holds 89.72 the 50 DMA like over 91.52 and R1 91.85 for a new swing trade.
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy an 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)
*ABBV inside day. 68.60 good swing risk but for shorter term trade can use 69.00 and has to clear 70.75
Category 4: N/A
Phase Change:
TIF have to wait for 94.52 then risk to the 200 DMA for swing.
Reversal Trades: N/A
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
PXD Inside day. Under S1 takes out outside day low for a mini to swing. Any OR
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
