So let’s continue our discussion about this patience thing. The market certainly tried ours day one into the week.
Furthermore, let’s examine the Russell 2000-after all, that is the instrument that exhibited ginormous volumelast Tuesday. Four possible scenarios prevail.
1) The blow off top pattern is still playing out-although possible, I would have expected a weaker close at least under the fast moving average.
2) The market is digesting the recent rally through time rather than price-looking more feasible as the trading range from Tuesday remains the trading range of the last 4 days following last Tuesday.
3) The market is digesting while it works off overbought conditions, and pretty much will continue to be range bound for a while longer-also possible especially given the Russian wildcard.
4) The market is not merely digesting, but fueling for a blast off from last Tuesday’s high with much higher levels to come-that could also come to fruition on the heels of some good economic numbers and a soothing Janet Yellen regarding bonds.
Regardless, the operative word is patience. No runs, hits or fouls.
S&P 500 (SPY) Low volume digestion day holding support Subscribers: Negative pivots in all
Russell 2000 (IWM) Held 118. Keep watching
Dow (DIA) Gets through 2014 resistance and everyone will feel a lot better-the bulls anyway
Nasdaq (QQQ) Check out 90.80 as a place to clear Tuesday Subscribers: Will give a tight risk to today’s low
XLF (Financials) Hardly budged-supports new high possibility
SMH (Semiconductors) Resting
IYT (Transportation) Shooting stars-big eyes
IBB (Biotechnology) Inside day resting
XRT (Retail) Held up really well and looks like a good place to look for higher
GLD Chop chop.
XLE (Energy) Has to clear 88.54 once and for all
TBT (Ultrashort Lehman 20+ Year Treasuries) Inside day. TLT Confirmed a phase change to bullish
CORN (Corn) Subscribers: 32.50 should be support
BAL (Cotton) Subscribers: Inside day
JO (Coffee) Subscribers: Made new highs
SGG (Sugar) Subscribers: Inside day and looks really good if holds here
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)N/A
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)
CNQ Has to break 37.64. Needs to hold the 10 DMA. (Slightly negative pivots)
FDX Needs to hold the 50 DMA. Really has to clear 139.39 to get moving
OXY 2 shooting stars which means over 97.75 clears it with a risk to 96.38 or the 10 DMA.
M Has to clear 58.66 once and for all with risk today today’s low for a day to miniswing trade
YUM has 2 inside days so a good daytrade around the core position
KSS 55.29 and above only way to buy it now-negative pivots but not for 2 days in a row, so keeping it here on the list
Category 4: (Rip Tide) N/A
Phase Change:
TFM Had a huge reversal and inside day under the 50 DMA. 35.96 has to clear and 33.50 should hold
PM Over 80.65 reentry with risk to today’s low-that will clear R1 and the 10 DMA
CREE Adding this because of the slingshot low in early February and a good performance today. Over 60.92 clears R1 with todays low a good risk
MO Inside day with the 50 DMA 36.41 key risk and has to clear 37.03
XOM Over 95.91 clears the 50 DMA with risk to today’s low most conservatively
GE Good over R1 26.19
NOTE: will be pricing AAPL volatility options spread going out about 6 months-maybe the 500/560s or 475/ 600s
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AMT Inside day. Has to break 80.29 and not clear the 50 DMA
Bye For Now!
