The market does not want to quit, gaining back more than ½ of its losses from Friday. And I love that so many traders try to pigeon hole the market into clichés as a trading methodology: “Sell in May, June Swoon, Turnaround Tuesday”, which brings me to Tuesday. The small caps (Russell 2000) closed firmly on the fast moving average; not a big surprise given that it never violated the trading range from May 22nd high to May 23rd low, had a low volume correction last Friday and like all indexes, remains in a bull phase. Although the S&P 500 broke the boxed in range from 2 weeks ago, today, it closed back within it-often a very positive indicator. Nasdaq the same with one more extremely interesting feature-strong volume-in fact, an accumulation day which means that the volume exceeded the volume from the day prior with a close in the green. Furthermore, the volume was higher than the daily average volume. If you add all that up-does seem like Turnaround Tuesday could be just that.
S&P 500 (SPY) Comments over the weekend: “Could it comeback? Sure. But it will have to start with a close back over 164.00” And so it goes. Now, over 165 and new buying should come in. Under 163 and the 50 DMA is next Subscribers: Negative Pivots in all indexes-IWM DIA more neutral
Russell 2000 (IWM) Also had an accumulation day in volume besides the “stronger than the other indexes” performance. Ultimately would have to clear 100, but fro now, holding around 97.50 would be positive.
Dow (DIA) Inside day-also interesting
NASDAQ 100 (QQQ) 73.70 big area to clear for more signs of strength and 72.75 the area to hold
ETFs:
GLD 137 resistance and 134 support with a nearly impossible read on the technicals other than the bear phase
XLF (Financials) Held the boxed in range and the 80 monthly moving average
IBB (Biotechnology) Holding the 50 DMA
SMH (Semiconductors) Inside day and good performance.
XRT (Retail) 77.00 held for now but now has to clear 78.00 on a closing basis to return confidence
IYT (Transportation) Touched and held the 50 DMA. Now, like to see it return over 113.
IYR (Real Estate) First green close in 6 days. Still needs to clear 69.50 for a better confirmation the worst is over
USO (US Oil Fund) As I have been writing, yo-yo action.
OIH (Oil Services) Held the 50 DMA and like again over 43.80
TBT (Ultrashort Lehman 20+ Year Treasuries) 66.16 is the low of the green bar from 5/28.
XOP (Oil and Gas Exploration) Better, but want to see it clear the fast moving average
XHB (Homebuilders) Narrowly escaped changing phases and impressively held the 50 DMA
UUP (Dollar Bull) Unconfirmed phase change to warning
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) 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:
PRU Good candidate if the market stays firm. Just cleared the 80 monthly moving average last month. Risk 68.30 and like to see R1 70.20 clear
SKS Today’s low must hold and over 15.03 could see more upside with 16.17 recent highs
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:
ROST Tested and held the 50 DMA peeking out over the pivots end of day. 65.26 clears the 10 DMA and R1 with 64.22 good are of support
NTAP Got out on Friday, but now, over R1 would get back in if holds 37.30
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either 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)
KSS 51.00 support and max risk with 51.70 the 10 DMA to clear especially on a closing basis
MJN Nice correction, good recovery today. 81.90 now support to hold
IR 58.92 is the slingshot high to clear with 57.65 a good area of support
Category 4: (Rip Tide) N/A
Phase Change:
BEAM Tested and held the 50 DMA. Watch 64.50 to hold and 66.65 to clear
PM Possible slingshot low off the 200 DMA. 91.75 a closer support area to use with93.00 resistance to clear
DECK Some of you might have bought ½ position today over the pivots. Now, has to clear 55.15 the 150 DMA and R1 and hold 53.94 the 10 DMA.
FDO as pointed out in video, want to watch this one if clears the 50 DMA and the moving averages are converging
BXP Possible slingshot low if confirms and same with the phase change to bullish. Over 108.90 would be good if holds 107.50
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
EXPE 58.12 max risk with a break under 57.00 reason to think more downside
ACE Under 88.00 could see bigger move down
WLL Only now under 46.20
PANL OR high failure a better risk if cannot clear 29.85
