The 2nd Largest Ball of Twine on Earth
It was suggested to me last week that our hapless Economic Modern Family seemed headed to Walley World, not unlike the Griswold’s ill-fated trip in the film “National Lampoon’s Vacation.”
After all, last Thursday we left our family on the side of the road in an overheating minivan. The Griswold’s drove a Wagon Queen Family Truckster! During their travels, they run into numerous mishaps-my favorite–their very “blackish” sense of humor of tying dead Aunt Edna’s corpse to the roof of the car.
Our Family came real close to having to deal with corpses, first with the earlier dump of Sister Transportation, who then finds a new lease on life by the week’s end. Then, Brother Semiconductors, who had a dramatic selloff until last Friday, when it ultimately held above the 50 DMA.
Despite the Griswold’s misfortunes, Clark, the dad, becomes obsessed with getting to Walley World. How perfect that our Granddad, Russell 2000, seems equally obsessed with keeping the rest of the family intact regardless of news, fears of higher rates, stronger dollar, etc.!
Clark’s greatest ally is his son Rusty. Russell 2000’s greatest ally is KRE, theRegional Banks, blasting to new highs on Friday.
That leaves Big Brother Biotechnology and Grandma Retail. Biotechnology in particular, as the most affable of the bunch, closed at the top of a month-long range. Retail, did the same, although its range is not nearly as impressive. The peak high in March was 102.50. Retail closed right on the 50 DMA.
How the coming week unfolds begs the question, will it evolve comparably to the Griswold’s when they finally make it to Walley World only to find it closed for repairs?
If we stretch the analogy further, replacing the Federal Reserve with Walley World, the action of the 20+ Year Treasury Bonds last week suggests QE is closed for repairs, putting to bed those wondering if the Fed might come back in to ease further.
Therefore, If Granddad Russell 2000 does like Clark Griswold did slipping into madness realizing all of his efforts had been for nothing, we might find our Family ditching the car to fly home.
But, if the Fed, like the Walley World Park Owner, understands the Russell 2000s impassioned longing to take his family on the perfect vacation, then we could see the Fed hint of a rate rise, while giving everyone ample time to enjoy the park as its guests.
S&P 500 (SPY) Unconfirmed warning phase with support now at 208.40 and if clears 210.58 better Subscribers: Negative Pivots in all
Russell 2000 (IWM) Tore away from the pack and over 125.93 will lead the others
Dow (DIA) Down to test late April early May lows in a confirmed warning phase
Nasdaq (QQQ) Double top looking more possible with support to hold at 108.35
XLF (Financials) 24.95 the point to clear with 24.45 the 50 DMA
KRE (Regional Banks) Closed on the highs for the year-well, I am rather proud of our conviction here through thick and thin!
SMH (Semiconductors) Giving it leeway to 56.50 and over 58.00 much better
IYT (Transportation) 151.80 the pivotal weekly moving average cleared handily. That should help the market
IBB (Biotechnology) 368.25 next hurdle
XRT (Retail) Sideways Grandma-trying to align with her strong and her weak family members-divided and maybe the decisive factor next week
GLD (Gold Trust) Possible reversal off the lows which will look confirmed over 112.40
USO (US Oil Fund) Over 20.00 better
TAN (Guggenheim Solar Energy) A possible reversal after making new lows which confirms over 42.00
UUP (Dollar Bull) Stronger dollar but nowhere near the recent highs
RSX (Russia) Possible reversal off the lows which will look confirmed over 18.04
DBC (DB Commodity Index) Confirms a reversal over 17.58
SGG (Sugar) Trying to bottom
PHO (Water) Held where it needed to
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 3, Intermediate-Term Negative 1, and Long-Term Positive 5. 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)
PNRA Like on any OR if holds 180.00-it cleared back over the 10 DMA at 183.07-now pivotal
TASR Like on any OR but use a shorter term risk to Friday’s lows now and over 32.00 opens well
M 2 Inside days. Find these best for momo trades if holds 68.15 and clears 69.55. All-time high is 70.00 so if that clears who knows?
RHT 76.33 is the 50 DMA risk point, any OR is good, and over 77.76 is good swing
Category 4: N/A
Phase Change:
SODA Held the 10 DMA at 21.49. Like if can clear 22.00 with risk to 20.56 the 50 DMA
JAZZ Phase change if confirms with a close over the 50 DMA at 179.76. Risk for swing but exit if doesn’t confirm the bull phase. Any OR
ONVO Looks coiled to move off the base. Inside day and like against 4.56 the 50 DMA point to clear 5.06 or 2 ATRs. Any OR
Reversal Trades: (Glass or Brick Wall Bottom or Top):
SFM Like that it had 2 doji days over 29.00-tight risk if clears R1 and Friday’s high for a mini to swing-5 to 30 min OR
Shorts: Focus List: JBLU UAL KORS
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
LMT Risk to Friday’s high and the 200 DMA. Any OR Mini to swing
Category 6:N/A
Best Best wishes for your trading,
Michele Schneider
