All said and done, the Dow is down around 3% from its all-time high. It seems fair to say that the lack of buying to keep us up at the highs or get us to new highs is concerning; and, that corrections, since 2014, have taken a more volatile form as the market swings 200-300 points on any given day. Fait Accompli mon amis!
If we revisit Granddaddy Russell 2000s (IWM), after its yearlong consolidation in 2014, with recent highs 123.78, 122.15 the pivotal area and 119.83 last week’s lows, I would continue to watch those critical levels with an open mind to a trading range is a trading range until it’s not. (Remember Mr. Ed?)
Grandma Retail sector (XRT)-held 98.45. She may have tightened the spending reins, but hasn’t put a moratorium on shopping just yet.
Brother Biotechnology (IBB), still kicking back, but he ended with a doji day, just in case.
Sister Regional Banks (KRE), held 41.06, the January Calendar Range high and impressively outperformed the market (except for IWMs).
Brother Semiconductors (SMH) figured he better come out of hiding and offer support to his nearly dysfunctional family. Semis closed green in a sea of red, defending the Bullish Phase.
The transgender sibling, Transportation (IYT), she held 160, but still getting comfortable in her skin. Fair to say over 162, she’s adjusting well, under 160, gonna need more time.
Sadly, the in-laws, S&P 500 and the Dow, could not confirm with a close over their 50 DMAs; rather, reentered an Unconfirmed Warning Phase. Finally, Uncle NASDAQ, held above 104.50, nevertheless could not cross 106 leaving usMitendrinen, Yiddish for right in the middle. Hey, what’s a modern familywithout multi-cultures?
S&P 500 (SPY) Unconfirmed warning phase with Friday’s key support and through 205.94 recapturing the 50 DMA. Subscribers: Negative Pivots
Dow (DIA) Unconfirmed warning phase with Friday’s key support and through 177.66 recapturing the 50 DMA.
Nasdaq (QQQ) 104.48 the 50 DMA and 106.00 the point to clear
XLF (Financials) Inside day. 24.60 the point to clear, then 24.90 and has to hold 24.05
KRE (Regional Banks) Inside day.
SMH (Semiconductors) Always good to have a big brother around when you need him. Hey bro-don’t leave yet, ok?
IBB (Biotechnology) Has recent highs to clear but as long as it holds over 342 area all good
XRT (Retail) 2015 high 99.74 with 98.40 area pivotal
IYR (Real Estate) 77.84 pivotal with a start below ominous
ITB (US Home Construction) Still have eyes here over 27.26
GLD (Gold Trust) 110 is the 2014 low area and under that see 100 possible
TAN (Guggenheim Solar Energy) If holds 42.00 can look for an reentry-otherwise, waiting for 40.00
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs support 126.35
UUP (Dollar Bull) So much talk about the havoc this is causing-can see why if you don’t know where to look
EWW (Mexico) Subscribers: Over 57.59 could get interesting
EWG (Germany) 29.50 next hurdle if holds 28.80
FXI (China Large Cap Fund) Holding the gap over 100 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)
KSS Has room over 74.94 with slightly negative pivots so they have to clear and preferably R1 too-day to mini
AAPL 122.30 area max risk or S1 since pivots are positive, let’s keep an eye on the over 124.25
ADSK over 60.88 like with risk to under 58.88 for a swing if market holds
PANW Over 142.50 like with risk to 139.65 for a mini to hybrid swing
Category 4: N/A
Phase Change:
XOM Possible slingshot if clears 84.50 with risk 82.68 the low
BAX Defended the slingshot low well on Friday so would look at an entry over 67.50 stop at new lows
SPWR We took an exit but still like it for a new swing over 33.05
KRFT Never set up on Friday, but still of interest over 62.10 for swing
JOY Inside day still working the brick wall low. Has to take out 39.70 hold 37.77
YOKU Classic brick wall bottom if holds 15.45 and clears 15.92-was a 2014 pick and one that can move if there is follow through
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ILMN 190.55 now resistance if this is to stay weak
NOC If cannot clear 161.35, can see 150.00 miniswing to hybrid
DISH Inside day under the 50 DMA-if breaks 73.44 could see 71.50 next for miniswing
GILD Under 98.70 breaks the 200 DMA for a day to miniswing trade
Category 6:N/A
Best Best wishes for your trading,
Michele Schneider
