All over the news: Market closes just shy of the 2007 high. Is that the finish line? Since the market has literally traveled straight up to get there, be prepared for one of four possibilities. One: We get there; take it out, close below, correction time. Two: We get there and reverse immediately. Three: We get there; blow through and onto new highs. Four: We don't get there and this was it. Whatever happens, this has been so much fun! Thank you, the goddess of trading!
S&P 500 (SPY) The 2007 high still in gear 157.52. A clear indication of which of the four scenarios will play out is if it breaks Thursday's gap low of 156.42. Subs: Pivots Positive in all indices.
Russell 2000 (IWM) After closing Wednesday over 93.75, it was the small caps which flexed its muscles. Looking at this, scenario three seems likely. However, 93.75 remains pivotal
NASDAQ 100 (QQQ) 69.00 has to clear and 68.00 has to hold. Subs: Logic dictates that since this index did not move along with the others, should the market turn around, this would be the first place I would look to short or buy QID.
ETFs:
GLD After the gap up on the 12th, it filled the gap making 153 the make or break area. Subs: Will be watching for a short on an OR range failure under 153, a long over today's high. Also watch GDX.
XLF (Financials) Good volume on today's move higher. Which could mean a parabolic move is still in play, or it could be a blow-off scenario that is in the works. Subs: Using the 10 DMA now for our trailing stop in the swing based on a closing basis
IBB (Biotechnology) - As one of the surprising leaders in the last few weeks, I would keep a close eye on this for signs of a potential roll-over.
SMH (Semiconductors): It's all about 36.00-and she is such a tease, closing right there! Subs: Still want to add but, will most likely wait until next week.
XRT (Retail) - Continues to make new highs on consumer spending fever.
IYT (Transportation) After clearing 110, reached a profit target today at 112. Subs: Keeping a no loss stop on the balance.
IYR (Real Estate) Did what it had to do, and needs to continue to hold today's low.
USO (US Oil Fund)- Unconfirmed phase change to accumulation with an inside day. Subs: Provided today's low holds, would be looking for a long entry assuming it confirms the phase change.
OIH (Oil Services) After an inside day, today broke above a several week base. Subs: Pushing, once again, against the 80 monthly moving average.
XLE (Energy)- This did exactly what the retail sector did, got through 2013 highs and kept on going.
TBT (Ultrashort Lehman 20+ Year Treasuries)- 68.00 to hold as this continues its basing action.
XOP (Oil and Gas Exploration)- As one of my favorite sectors this year, now trading at the top of a trendline going back to 2008.
XHB (Homebuilders) Still has to clear 30.00
UUP (Dollar Bull) Subs: A correction to the 22.30 area would offer a low-risk buy against the 200 DMA.
EWI (MSCI Italy Cap Index) Subs: Gapped higher today and we are back looking at a close above 12.60 for a continuation move up.
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:
AIG Inside day, four day correction. 38.77 max risk the 10 DMA. If this opens firm, watch for a 5 or 30 minute breakout.
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)
PRU- Inside day. Would use max risk 59.50.
PX Improved in condition. 114.00 should clear and today's low hold
LEN - A great example of a 2-day correction, continuation move. 42 has to clear for this to continue and 41 has to hold.
VIPS- Traded 10 times over its average daily volume of 300k, nearly 3 million! Either look for an OR reversal near the 10 DMA or wouldn't dismiss buying a continuation move over today's high with all-time high 28.49.
MSI Although it under-performed the market, with positive pivots over today's high will clear the 10 DMA. Buy only on strength, overwise the slingshot high is still in place
PH Has to hold the 10 DMA 96.50 and clear 98.00 to see the possibility of a move to 101.50.
SPLK New high close, has to hold 38.30 and has to clear the intraday all-time high 39.75.
OI- Signaled entry today at 26.90, as I like this for a swing trade would look for a buy opportunity close to 27.
LVS Another pick that under-performed the market, which means if it can clear 54.00 could play catch up.
HLX 23.85 is pivotal. Would also prefer to buy this one on strength over today's high.
APC New highs, look for a reversal.
Category 4: (Rip Tide) N/A
Phase Change: DE As long as this holds 91.70, I would continue to look for a buy opportunity against today's lows. ROK Confirmed bullish phase. Like to see 88.90 hold and 89.50 clear. UA Confirmed recovery phase. Look for an OR reversal.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
SPG Slightly positive pivots making today's high max risk and has to break today's low.
MHP Still interested in short under today's low and 200 DMA.
Others: AMZN TWC JWN JOY (all on watch if setup as possible rollovers)
Bye for Now!
