At least the run at the end of last week did not look like a blow off rally! In fact, it was surprisingly orderly. The jobs report was icing on the cake, but more importantly, what does the strong dollar, rise in rates, excellent group performance in areas related to US infrastructure add up to? It does seem like holding equities for a while longer or at least until the market internals reverse, makes a lot of sense. And amazingly, unlike other bull markets we have seen, there are still many equities that are just now coming out of 5-6 year lows, forming bases and offering excellent low risks.
S&P 500 (SPY) 2007 peak high 157.52 with 154.00 now good point to hold Subs: Positive Pivots
Russell 2000 (IWM) Uncharted territory now.
Dow (DIA) Of course this is looking overbought but somehow, not done yet.
NASDAQ 100 (QQQ) Perhaps the best opportunity or a major reason to worry as it has not pulled its weight? Regardless, a bull phase and we hope the former.
GLD Continues to hold the low from 2/20 with what could be a U-turn pattern if takes out Friday high.
XLF (Financials) Looking parabolic. Subs: 18.37 is 1.5 ATRs from entry if want to lighten there on a hybrid trade
IBB (Biotechnology) Kind of unbelievable really.
SMH (Semiconductors): Subs: Now 2 days under pivots and real close to 35.20 the 10 DMA which is the new risk. Will watch for a low risk entry against that support
XRT (Retail) Pushed through the wall and not overbought at all
IYT (Transportation) Through 110, who can argue? Subs: FDX set up very similarly.
IYR (Real Estate) 3 day correction or early warning sign? Subs: Held the 10 DMA and still big eyes here for a rollover if the market corrects
USO (US Oil Fund) Looking like a near-term bottom has formed. Subs: If 32.96 holds, then would look at the move to the 200 DMA and beyond
OIH (Oil Services) Started to pull out of limbo if Friday low holds Subs: We are back to watching the 80 monthly moving average
XLE (Energy) Cleared recent resistance but still has the top in place form early February.
TBT (Ultrashort Lehman 20+ Year Treasuries) Hello! What a parabolic move looks like.
XOP (Oil and Gas Exploration) Into some resistance at the weekly Bollinger Band but not overbought so a correction to 59.00 would be good.
XHB (Homebuilders) After a 2 day correction, ends the week with a doji day. Eyes here if market has a correction for a possible short
UUP (Dollar Bull) Right up to the 200 weekly moving average and on cue. And not overbought.
EWI (MSCI Italy Cap Index) Subs: As long as this holds Friday's low, not too worried about Italy's downgrade-that is not news anymore.
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.
*Note: I am starting to include stocks that are coming over the 80 monthly moving average that have not traded above that level since the end of 2007. They broke with the recession and if the economy is improving, could be great low risk entries for swing trades. You must have a plan that includes 1-4 picks to watch before the market opens. If not sure, you can always ask me.
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:
AMZN Sideways with the 10 DMA as support if can get a low risk entry against that.
EXPE 64.00 is the risk and through R1 looks good at least to 68-69 level
SRPT Inside day and good risk to Friday low with move over Friday high lining up with R1.
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)
HCA Exited with a slight profit but the real risk remains under the 10 DMA 36.64. Watch for a reversal or breakout as if this gets legs could see move to recent highs
HLX As long as Friday low holds, has more room to upside
NFLX Improved to a condition 1. Like to see 184 hold and then looking for 190.
GME Confirmed to bullish if 24.45 holds. Good trendline from highs will show you on Monday's video.
HES Had a head fake but holding the gap low from 03/04 or 68.26. Inside day and like through Friday's high.
CBL Small stock but holding the 10 DMA, crossed the 80 monthly MA and if holds Friday's low could see move to 2007 prices.
TEX The Opening Range Reversal was a fabulous low risk entry. Has resistance at the 80 monthly we will watch.
MTW Watch for a reversal here. Through 19.90 clears the 80 monthly moving average
APC Now would like to see this clear 83.75
SLB Needs to clear 78.00 and hold 77.30
ROK Underperformed so watch for strength through Friday's high
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
RDC 34.35 good risk with a DOJI day. Still a candidate
Phase Change: X Has to hold around 20.58 Resistance at the 200 DMA for now. Seems dormant LVS Still above the 50 DMA so if stays there remains a candidate. CNQ confirmed bullish phase and inside day SLW Long and will add if takes out Friday high or exit if breaks 29.72. KSS Holding ½ position after locking in ½ ATR and looking for Friday low to hold. MOS Tweeted the OR breakout entry and now unconfirmed phase change to bullish. Watch for a reversal against 59.48 the 50 DMA. DE Returned to unconfirmed bullish phase if holds Friday low and has room to 94.00 DO No phase change but a wall of support at 67.09 and has to clear Friday high and R1.FB As long as 27.58 holds, with an inside day, one to watch so close to the 50 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
TOL Unconfirmed warning pause if cannot clear 35.25 and since we are watching XHB if market fails, could be a good short here
BIDU Short ½ position from Friday and now looks like a move to 66.00 is not out of the question. Risk is 90.54
MHP As long as this does not cross 48.45 the 200 DMA looks vulnerable under 47.05
Bye for Now!
