Good things come in small, tidy packages and Thursday the package arrived in the form of a 66-year old man from Italy and President of the European Central Bank -Mario Draghi.
That made not only our rotation of sectors call outs into Retail, Regional Banks and Biotechnologyprofitable, but also gave the small caps a healthy and welcomed push up over the 50 DMA plus.
Wasn’t too shabby for the S&P 500, Dow or NASDAQ I might add. However, the interest rates or long bonds, after touching down on the 50 DMA popped, while the US Dollar touched the 200 DMA for the first time in nearly a year, then fell. Hard.
So, next rotation? Jobs report in the AM-a rather cryptic Janet Yellen. If interest rates drop again, look to certain commodities especially gold and silver (perhaps miners as well) with Homebuilders, lagging behindReal Estate, breaking away from its congestion (ITB) over 24.40.
S&P 500 (SPY) Day 8 and counting of the breakaway gap Subscribers: Positive Pivots in all
Russell 2000 (IWM) 115.25 next hurdle and now, 114 good support to hold if strength is here for the interim haul
Dow (DIA) Rest over-new highs
Nasdaq (QQQ) New high close again
XLF (Financials) Hello new high close!!!
KRE (Regional Banks) Did you watch the 50 DMA after an inside day-now in the rear view mirror?
SMH (Semiconductors) Sweet semis
IYT (Transportation) Looks ready for next leg up
IBB (Biotechnology) Stair climbing which seems mild compared to some other groups-but don’t discount that
XRT (Retail) 85.23 next hurdle then looks like the next mover
IYR (Real Estate) Man, I should only do so well after a 3 day rest!
ITB (US Home Construction) Big eyes here over 24.40
GLD Not exciting but not going south while rates drop
XME (S&P Metals & Mining) Subscribers: Over the 200 DMA (40.00) looks great after slingshot pattern
OIH (Oil Services) ladder up
XLE (Energy) New highs
XOP (Oil and Gas Exploration) 78.00 a big wall to cross
FCG (First Trust ISE Reserve NatGas) 22.30 support with another good looking chart
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs defended the 50 DMA and now will look at the resistance at 112.90
PHO (Power Shares Water Resources) Water ran up big today
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:
PEP If today’s low holds, and it gaps over R1 on a 5 minute, good setup
PM Inside day and over R1 could see next leg up for a mini to hybrid risk is 10 DMA 87.60
Category 2: (Pipeline) N/A
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)
BIIB 6 days of consolidation which clears over 322.25 with swing risk 313 or S2
CTRP Inside day with a move over 58.00 great for a mini or hybrid swing risk to today’s low-see it on the Nuggets List
TSLA If 206.65 level holds, then like for a move especially if clears 210
LEN Got a good close, now needs to clear 41.00 intraday and move out of the congestion with good risk to todays low
KRFT Has to clear 59.15 and hold 58.63
GOOG Hitting the 10 which means over still good and risk now 544
EQT Like over 107.03 after inside day with risk to 105
Category 4: (Rip Tide) N/A
Phase Change:
AMZN ORR now against the 50 DMA
RIO Brick wall bottom, clearing the 200 DMA and like now over 53.17 risk today’s low
KSS 54.80 and above only way to get in now
SWI Nice start of a move over the 200 DMA and now has to clear 39.57 to keep going and hold 38.90
GT Looks good if holds 26.65 now
WMT 77.43 is the point to clear and we will buy
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MOS If cannot clear 49.45 still of interest to short
POT Confirmed warning phase and risk to today’s high if breaks 35.40
LNKD consolidating under the 10 DMA so if breaks 152.20 could see lower
Bye For Now!
