All things considered, the market tied itself up into a tidy little bullish looking package on Wednesday with the expected follow through in the certain sectors we have been focused on.
The bow the package needs and now most encouraging is the Russell 2000s testing Tuesday’s low and the 200 DMA once again leaving a bullish engulfing pattern and a tease of the 50 DMA which it could easily blow through Thursday or Friday.
Retail caught up and ended with an unconfirmed phase change to bullish while Biotechnology broke out above several days of consolidation. Regional Banks rested with an inside day while the sector on steroids-Semiconductors continued the journey to new highs.
Interest Rates (TLTs) held steady at the 50 DMA and most likely will remain lackluster until post jobs report this Friday.
Everything is panning out the way the Fed wants the market to believe- US economy will continue to grow-good for the stock market in what seems even more likely now than when I first wrote about it-a summer rally.
2014 is nearly ½ over. Hot off the twitter press, here are some of today’s comments from a few premium subscribers:
M. Shah @manishashah3 Your mentoring has helped me a lot. Trying to find pearls and have reasons for every entry and exit.
E. Williams @ElnoraWilliams Thank you Mish for guiding us through this market ... liked the way you traded LVS today ... wouldn't have known to do that!
John K. @khnjohn Good work Mish in a tough environment. Much appreciated.
M. Knapp @TraderTechsYou have kept us positive in a market that is an absolute shredder and a widow-maker in 2014!One more thing - I joined this service to learn, not to hire a nursemaid, and what I have learned to date, is of great value.
Thank you followers!
S&P 500 (SPY) Day 7 of the breakaway gap with the prescribed rest. Subscribers: Positive Pivots in all
Russell 2000 (IWM) The 50 DMA and then 112.93 areas to clear-otherwise, the next penetration of the 200 DMA won’t stick
Dow (DIA) Resting
Nasdaq (QQQ) After4 days of consolidation new high close-AAPL big reason
XLF (Financials) Looking better
KRE (Regional Banks) watch the 50 DMA after an inside day
SMH (Semiconductors) Rocket job!
IYT (Transportation) Inside day so could just be resting
IBB (Biotechnology) Broke above the congestion and now has to hold around 242
XRT (Retail) Great move off the converging moving averages. 84.00 support to hold
IYR (Real Estate) Resting
ITB (US Home Construction) More consolidation which I like if holds 23.75 level-today's low 23.76
GLD Reversal not confirmed and looks like a new leg down likely
OIH (Oil Services) Inside day
XLE (Energy) Look here after 2 inside days
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs down a lot now so perhaps some bounce with the 50 DMA so close
UUP (Dollar Bull) Closest its been to the 200 DMA since a year ago
EWP (Spain) Subscribers: Over 42.60 might take a shot against the gap low 42.30
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:
CVS Over R1 especially if gaps higher, a good Miniswng trade
FDX If holds today’s low, like over R1 and todays high which lines up-Miniswing
KRFT If today’s low holds like over R1 for another miniswing trade
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:
GOOG Held the 50 DMA and now, has to clear R1 which lines up with today high 549.15
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)
MS Over 31.44 clears the resistance otherwise look for an ORR
WSM Like over R1
JWN Compressed after breakaway gap. Has to hold today’s low
CMI 154 now has to clear and stick
HP Over 110.46 looks good with max risk todays low
EQT Like over 107.03 risk to today’s low
PLD Has not had a close over 41.50 since early March-a move above and hold good for re entry
Category 4: (Rip Tide) N/A
Phase Change:
AXL Inside day under the 200 DMA-learning from our BZH, wait for 19.04 to clear
X Brick wall bottom with good volume. Confirms over today’s high and the 10 DMA with risk to today’s low
KSS A fave this year and over the 200 DMA now so like it for a move over the 50 DMA or an ORR against the 200 DMA
GT Looks good over 26.65
STT Cleated the 50 DMA and now can look at an ORR against it
GS Like an ORR to control risk but also like if clears the 200 DMA
WMT 77.43 is the point to clear
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MOS Big range with risk now 49.60
RIG Inside day and under the 50 DMA will look good for a move down to 40 or so
Bye For Now!
