After the warning on the small caps yesterday, for a while on Tuesday, it seemed like the market was in for a big correction. But, keeping with the Russell 2000, it closed down marginally but with a doji day which means lots of investors are holding their breaths. Money rotated into some commodities today as rates dropped. Although good to follow the money, stepping back, the scenario does look more likely for rates to firm more. But, it would be advisable to see how this plays out before jumping back into short bonds.
S&P 500 (SPY) 154 the support area with the 2007 high still in gear 157.52 Subs: Pivots Negative
Russell 2000 (IWM) 92.68 was the brick wall high that cleared last week. That is first area of support with 93.75 the wall to cross. Subs: Took home TWM as a hedge but if IWM crosses and holds over 93.75 that will be short-lived.
Dow (DIA) Held up the best, closed green and is really overbought. Subs: Pivots here are still positive so watch S1.
NASDAQ 100 (QQQ) AAPL was a one day wonder therefore NASDAQ traded in its new sideways range 69.00 high to 68.00 low
GLD 153.50 is the support to watch for a hold or break with 156 next resistance
XLF (Financials) Inside day. Subs: Using the 10 DMA now for our trailing stop in the swing based on a closing basis
IBB (Biotechnology) This group not only surprised me once; it continues to do so
SMH (Semiconductors) Now it's all about 36.00 Subs: The longer it holds 35.00, the better
XRT (Retail) Taking a sideways rest
IYT (Transportation) Through 110, who can argue?
IYR (Real Estate) Tested and held the fast moving average. Above today's high would be a good sign and below today's low more reasons for concern.
USO (US Oil Fund) Gapped higher but failed to close above the 200 DMA Subs: No phase change making today's low important if holds or not
OIH (Oil Services) Mainly I see a sloppy chart Subs: We are back to watching the 80 monthly moving average
XLE (Energy) Has to clear the top in place form early February.
TBT (Ultrashort Lehman 20+ Year Treasuries) A move down to 67.00 would be a very tempting area to buy. Subs: This could have been the 2 day correction. If so, would use 68.00 as a risk and look for a buy opportunity over the pivots
XHB (Homebuilders) Closed under 29.52 the February high. If holds 29.00 and crossed back above the old high, good sign
UUP (Dollar Bull) Subs: I am thinking that this little correction from the 200 weekly moving average could be over with a stronger dollar to come-evidence would be a move over 22.53 R1
EWI (MSCI Italy Cap Index) Subs: Getting bored with this trade-stop most likely under S2 tomorrow
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:
SRPT After 2 Inside days and a dicey morning, turned around and closed above the 10 DMA. To be conservative needs to cross R1 and hold 30.35
SPLK Inside day with good max risk under 37.50. New issue from 4/20/12 with high 39.75
OSK Holding the 10 DMA 39.00 max risk and still room on upside if can clear 41.25
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:
MSI 4 day correction under the 10 day moving average at 62.50. If can clear that and R1, could be good with risk to today's low.
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)
QCOM If holds 66.22 just around the 10 DMA, and sets up on an OR breakout or reversal tomorrow, could see move to recent highs
BEAM Like the tight risk to today's low and if can clear 62.00 should continue up
EXPE Got to 66.00, next target 68.00. Today's low good risk
APC 84.45 is a new high close, but the daily RSI is climbing up for any new entry
CAM I rarely give a new high type trade, but this had an inside day and good risk to the 10 DMA 64.25. Neutral pivots
PRU Inside day and not overbought with max risk 59.30
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:
CHKP Now oversold on daily with the 50 DMA at 50.08 max risk.
Phase Change: LMT Confirmed phase change to bullish as long as it holds 89.70, Monday low. Inside day as well. RTN Confirmed phase to bullish with max risk now 55.56. X Resistance at the 200 DMA for now. Seems dormant but holding on CNQ Now has to clear 31.65 SLW Still has to get through 32.00 to get interesting and hold 30.80 DE If holds 90.22 then will look for another low risk entry FB As long as 27.58 holds, I'm in. Otherwise, gone until it clears the 50 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AAPL Inside day and a possible drop to 365 over time. Max risk is 433.50
COH 49.50 now new max risk and 47.50 next support
WLT 31.55 good risk level and 29.50 some support
MHP Unconfirmed distribution phase if stays under today's high. Looks like a bear flag forming that is substantial
SPG If market struggles, this went to an unconfirmed warning phase provided it does not clear 160.45 the 50 DMA
Bye for Now!
