So have I made my point yet? The one about Sheep scattering, grazing, filling up, pooping and then scattering again? Good. Let’s put that aside now and talk about trading ranges, and leading sectors/ groups.
Beginning with the 2015 Granddaddy of indices, the small caps Russell 2000s(IWM), in my Sheep world (couldn’t resist), the moves have been fairly gentle on both the up and downside. A bit gentler on the upside than on the downside initially, true; but Thursday would make the competition on which way was less/more gentle a tie.
My point is that the Russells, after a yearlong consolidation in 2014, should dominate this year. That means, I will keep my eyes here to dictate the moves within its range thereby, if it breaks the highs, expect the others to keep moving up. Conversely, if it breaks this week’s lows, expect a decline back to its early 2015 lows around 114.00, dragging most things in its path along with it.
Not that IWM stands alone-it has family, whom we will call Grandma and siblings. Grandma is the Retail sector (XRT)-after all, she controls the family budget. Retail, which I mentioned, had a reversal pattern that negated itself over 98.45, soaring through that level and looking like it too wants new highs over the recent early March high.
Brother Biotechnology (IBB), is saying, “Hey bro, done my job already. I’m just gonna kick back here, smoke my pipe and let you all catch up.”
Sister Regional Banks (KRE), well, she acted like Wonder Woman, flying through the January Calendar Range high and onto new highs since the one posted nearly a year ago at 42.79. You go Sistah!
Then there’s the mischievous youngest brother Semiconductors (SMH). He’s like, “I carried this family for 3 years now. You guys take the ball since I am heading to the Cuba-now that I can.”
Finally, there’s the transgender sibling, Transportation (IYT). He now she, felt whole again beginning Wednesday by putting in a reversal candle. Then on Thursday, she cleared the 10 and 50 DMAs and closed well enough to be a contender. She has a ways to go before seeing the January Calendar Range high, but we will have patience since she’s just getting used to her new found confidence.
We do want to see confirmation as this week draws to an end. The in-laws, S&P500 and Dow, have to close above the 50 DMA again tomorrow to stay inbullish phases. And Uncle NASDAQ, now falling behind, has to at least trade above 104.50. If it clears back over 106, the market (like my sheep) will head into the weekend very full, and maybe even a little bloated!
S&P 500 (SPY) Unconfirmed bullish phase provided it holds 206. Subscribers: Positive Pivots
Russell 2000 (IWM) Recent high 123.78 with 122.15 area pivotal-good volume too
Dow (DIA) Has to hold and close above 177.70
Nasdaq (QQQ) 104.48 the 50 DMA and 106.00 the point to clear
XLF (Financials) 24.60 the point to clear, then 24.90 and has to hold 24.05
SMH (Semiconductors) The 50 DMA is 55.05 which has to hold now-
IYT (Transportation) the 50 DMA or around 161.55 now has to hold
IBB (Biotechnology) Has some resistance to clear but as long as it holds over 342 area all good
XRT (Retail) 2015 high 99.74
IYR (Real Estate) 77.84 has to hold to keep this in the game
ITB (US Home Construction) Still have eyes here over Thursday’s highs
GLD (Gold Trust) 110 is the 2014 low area and under that see 100 possible
GDX (Gold Miners) Did not confirm the reversal candle.
TAN (Guggenheim Solar Energy) Negated the island top. If holds 42.00 can look for an reentry
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs support 126.35
UUP (Dollar Bull) Took a much needed rest
EWW (Mexico) Subscribers: Confirmed the reversal bottom with
EWG (Germany) 29.50 next hurdles if holds 28.80
RSX (Russia) Tight stop under the 50 DMA
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: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)
MNST 137 now the near-tem support and over 137.87 clears the 10 DMA
CLDX Inside day and usually fear pharmas but this one could be good daytrade over 29.88
KSS 74.25 level now support to hold and has room over 74.94
WFM Max risk is the 50 DMA and could add over 54.84
AAPL 124 now the point to hold for a miniswing trade
Category 4:N/A
Phase Change:
GOOG over R1 against the 200 DMA could see a new swing trade
SODA If holds 17.25 now, like over 18.00 for a swing trade to see if this can bottom
SPWR 2 inside days so a perfect one to add the other ½ back to over 33.05
FAST another bottom potential after slingshot if clears 41.05 and risk to the recent lows
PAY Inside day. Has to hold 34.45 and clear 35.35
KRFT Brick wall bottom if holds today’s low for a swing
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ILMN 189.60 now resistance if this is to stay weak
GEL Under 42.70 like for a mini to swing risk 45.00 with target of 36.00
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
