It’s The Same Old Song
Four Tops 1965
Last week, 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 placed the Economic Modern Family (IWM, XRT, IYT, SMH, KRE, IBB), and Cousin Eddie (GREK) in 7 Rooms of Gloom.
Gloomy, but not doomy depending upon where one looks in the Sheep pasture.
Some sheep are still peacefully grazing. Regional Banks certainly love the forbs of possible higher interest rates. Grandma Retail closed well over the pivotal point of support and not too far from the next hurdle for the upcoming week to clear-102.
Grandpa Russell 2000 got his fill after making new highs. On low volume, IWMcorrected into decent support around 127.00. This can even handle a lower correction without upsetting the trend-a shearing so to speak, but far from slaughter.
Semiconductors had a rough end to the week. A bit more than a shearing, perhaps a few nicks to the skin, but not necessarily a slaughter there either.
Transportation, consensus would most likely agree, slaughter. With a close on new 2015 lows, many investors took on a more defensive tone since once a wolf enters the pasture, a good Shepherd protects the remaining flock.
Cousin Eddie (GREK), he paced the perimeter and dodged the wolf for now.
Hence, it’s with Eddie’s tenor we begin this week-pacing, fearful, and hungry. We look to the Russell’s to calm nerves and hope that the sacrificial Transportationsector sated the wolves’ lust for blood.
S&P 500 (SPY) 209.50 support, 210.80 pivotal Subscribers: Negative pivots in all
Russell 2000 (IWM) Support at the 10 DMA and back over Friday’s high 128.34 calming
Dow (DIA)Over 179.85 better, over 180.24 good and with an inside day, look for this to hold last Thursday’s low 178.59. Then look at 177.10.
Nasdaq (QQQ) After the rough end of the week, it did manage to hold onto the 50 DMA and the bullish phase. Monday’s open should be key indication of next direction
XLF (Financials) Inside day. 24.65 support to hold
KRE (Regional Banks) Closed near 2015 highs. Prodigal Son!
SMH (Semiconductors) Ouch. We want this to hold up and not continue to drop like his sister Transportation has. Needs to get back over 57.40 or see a drop to the 200 DMA especially if tape is weak
IYT (Transportation) New lows for the year
IBB (Biotechnology) Correcting so will watch this sib to hold the 50 DMA.
XRT (Retail) Holding 100 and needs to clear 102
IYR (Real Estate) Holding monthly support with a ok volume possible reversal pattern
XHB (US HomeBuilders) Closed over 36.98- 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
XLE (Energy) New 60 day low reversal with average volume so needs follow through
TAN (Guggenheim Solar Energy) If sees 40.00 again still a good low risk place to buy
TLT (iShares 20+ Year Treasuries) Under all support now and not that oversold either
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) Last time this was over the 200 DMA was April 2014
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 5, Intermediate-Term Negative 2, andLong-Term Positive 5. 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:
*ALKS 64.13 now good support with a move over 66.32 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:
TXT Real close to the 50 DMA support at 45.40 should this clear pvitos 45.68 then R1 45.84 for swing
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)
*FBHS Nice move up Friday-now can look for an ORR or continuation as long as risk to 46.00 area is close enough for swing
*BMY 66.40 is the 50 DMA for max risk and can do any OR for a day to swing
*JAH With its volume spike Friday, like on any OR and if clears 54.50 its to the races with risk to the 10 DMA closest
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
*CIEN Oversold. The 50 DMA is 23.42. Has to clear 24.50 first then 24.93
Phase Change:
DLR 65.74 is max risk against the 50 DMA. Can buy on any OR with positive pivots. Should clear the 200 DMA at 66.74 as well for swing
*CBI Clean risk to 51.00 can do any OR since pivots are positive. Over 52.96 clears the 10 DMA
Reversal Trades: N/A
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
*GOOG Broke all support, daily, weekly, monthly. Risk is 540.52 best and under 530 could see way lower over time. Swing Any OR
Category 6:N/A
Best Best wishes for your trading,
Michele Schneider
