Right Round Like A Record, Baby; Right Round Round Round
We left last week with our Economic Modern Family stuck in gridlock. I begin this week sounding like a broken record.
Let me “spin” that-I begin this week singing a familiar tune that has spent the last 5 months at the top of the Billboard Charts-Ewe Keep Me Hanging On!
Trading range (sheep pasture) stubbornly continues now into its 6th month. TheRussell 2000s found some stride clearing back over the 50 DMA while GrandmaRetail began the week unmoved closing flat on the day. Semiconductors andBiotechnology took a breather and Regional Banks whipsawed a bit, ultimately closing in relatively good shape.
Who was the star of the family? Transportation. After ditching the minivan wondering if she was a good sheep or a bad sheep, Monday, she hesitantly climbed back in offering, “Okay, let’s go; but, I’ll hang out under one condition-if Granddad Russell puts pedal to the medal.
All in all, the one that keeps our ewes hanging on is the Federal Reserve. There is plenty of daily trading activity in specific equities for good stock pickers, but the macro picture hangs in the balance until the Fed shows its hand on the next direction of rates.
S&P 500 (SPY) Again failed to clear the fast moving average even with the stronger open. 212.41 now resistance to clear and 209.90 the 50 DMA to hold.Subscribers: Positive Pivots in all
Russell 2000 (IWM) Now back to unconfirmed Bullish phase. Has to hold 124.26 the 50 DMA or will see yet another test of 122.
Dow (DIA) Inside day on the 50 DMA. 180.02 now the support to hold and 181.71 the fast moving average to clear.
Nasdaq (QQQ) Double top possible at 111.08-16 and support to hold now at 108
XLF (Financials) Inside day, 24.42 support at the 50 DMA with 24.90 the point to clear
KRE (Regional Banks) And back to sheep, trading ranges and Economic Modern Family
SMH (Semiconductors) New high then turned to close slightly red but not enough to think top
IYT (Transportation) Possible reversal especially if it can get back over the 151.60 level.
XRT (Retail) Over 99 will look better, under 97.00 trouble
IYR (Real Estate) Not dismissing this as a good base if can clear over 76.45
ITB (US Home Construction) Inside day under the 100 DMA
GLD (Gold Trust) Over 115 better if holds 114
USO (US Oil Fund) Over 20.50 looks better after an inside day.
TLT (iShares 20+ Year Treasuries) Retreated from 124 last week and now will see if it can hold 120.00 level
UUP (Dollar Bull) Stronger Monday and holding around the 50 DMA
EWI (Italy) Exited a long and now watching for a new one if it holds 15.30
CORN (Corn) Trying hard to hold after making a new 60+ day low
SGG (Sugar) Holding the March lows so far
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 0, Intermediate-Term Positive 5, and Long-Term Positive 9. NOTE: Market Tone is updated before the open each day and reported to you on twitter.
Category 1:N/A
Category 2:N/A
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)
CRM If holds 73.00 clears the 10 DMA. Then risk is today’s low for a miniswing best. Any OR
BKD Inside day. If holds 37.25, max risk, like for a mini to hybrid swing. Any OR.
GS 206.10 max risk. Like if holds around the pivots 207.80. Any OR for day to swing
GD Needs to clears R1 141.14 looks good with support at today’s low Mini to swing OR-Any
Category 4: N/A
Phase Change:
FB Swing good with risk to 77.90 the 200 DMA and like if begins over 80.26. Any OR
CSIQ Has to set up over today’s highs and R1 then can risk to the 200 DMA or 30.67 for a swing OR breakouts only
Reversal Trades: (Glass or Brick Wall Bottom or Top):
AXLL Over 38 looks good for maybe 3 ATRs. Risk is 36.75 10 DMA for mini to swing Has to have a 5 or 30 minute OR
Shorts:
Note: LO has a confirmed island top. Cannot clear 72.50 and now like an ORR best
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BBY 35.45 max risk with now negative pivots after an inside day. Could see new lows if breaks S1. Day to mini
DKS 54.26 max risk or R1 whichever is closer to the highs. Under 53.50 looks weak for a mini to swing
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
