I grew up in Queens, NYC. The closest I ever came to a sheep was when the family would go to Sheepshead Bay, Brooklyn to visit relatives. Bada Bing! Regarding my recent diatribe on sheep, I’m no expert.
But this much I do know-the market has been moving with the herd. Wednesday, the Shepherd came in the form of what I hope was at least a Hermes scarf wearing, Janet Yellen and the market loved every vague word she uttered-or is that uddered?
Therefore, our Economic Modern Family had a fiesta, except for the Regional Banks(KRE), which found the prospect of rates not changing, maybe changing, disconcerting. So, will our sheep now retreat after busting out of the pasture, back into the safety of their normal confines?
Continue to check in with the leaders, Russell 2000s-new highs after the year-long consolidation, Retail-gotta love $100, Semiconductors-helping enough to be cooperative, Biotechnology-big brother lending his hand andTransportation-nearly ready to take out January Calendar Range highs.
The plausible trading plan remains plausible. Buy dips that are orderly with tight stops in case of a massacre. Stay the course and/or look for shorter term trades when the sheep and family are grazing (up days) and get ready to takeprofits once the boundaries widen above the range assuming (like Wednesday’s), rallies can be shorter lived!
S&P 500 (SPY) Would not be surprised to see some digestion, but maybe not as it might have some catch up to IWM Subscribers: Positive Pivots in all
Russell 2000 (IWM) Cleared new highs and now needs to hold around 127.50 level for some slippage
Dow (DIA) 181 level next point to clear and 179 to hold
Nasdaq (QQQ) 108 remains some resistance based on closing price below and 106 has to hold.
XLF (Financials) we need to see this clear 24.90 to really be in gear!
KRE (Regional Banks) The Japanese Candlestick says it all-up or down encompassing the range over the last 4 trading days-now the way she breaks…follow
SMH (Semiconductors) Cleared 56.45 which would like to see hold
IYT (Transportation) 165.17 the high to clear and 162 area to hold
IBB (Biotechnology) Parabolic move continues!
IYR (Real Estate) Unconfirmed return to a bullish phase-liked the rate talk
ITB (US Home Construction) Just made it back to the January 6-month calendar range high
GLD (Gold Trust) That interesting inverted hammer candle did what it radioed it might do-took off on a good short-covering and maybe more fresh buying rally
USO (US Oil Fund) Ok-this is EXACTLY what you want to see-wait for it, wait for it and blast off-high volume, big range reversal off new lows. Needs another day to confirm for those still panting after it
OIH (Oil Services) Triple bottoms, now a big run here too
XLE (Energy) Right up to the 50 DMA-like to see that clear
XOP (Oil and Gas Exploration) Unconfirmed phase change to recovery
UNG (US NatGas Fund) Confirmed phase change to recovery
TAN (Guggenheim Solar Energy) This is the future!
TBT (Ultrashort Lehman 20+ Year Treasuries) Unconfirmed phase change in TLTs back to Bullish
UUP (Dollar Bull) Fell victim to the FOMC
EEM (Emerging Markets) Cleared the 50 and 100 DMAs today along with the rest of the herd
EWW (Mexico) Subscribers: Huge day with an unconfirmed recovery phase to hold up
EWG (Germany) Looks good over 30.00
EWY (South Korea) The setup I really like over 3 moving averages- wow!
RSX (Russia) 16.75 now should hold after this very impressive run up
BAL (Cotton) Subscribers: Think this is bottoming so looking for an entry somewhere around 41.70-41.90
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 74.60 area should hold and over 75.00 have a good day to miniswing trade
FB 80.30 now best risk and place to hold if this is to continue over 82.00-watch for an ORR or quick daytrade entry if happens
AFL Too bad FOMC happened since this took off fast right after. Now, maybe ORR-if not lets revisit if has an inside day
TOL 37.50 is a good tight risk now on an ORR or if this gaps higher for a 5 minute day to miniswing trade
IGT Lets start again if this holds today lows and takes out 17.84-have to do a swing risk since the ATR is so small
Category 4:N/A
Phase Change:
BAX 67.75 now max risk if sets up over 68.92 for swing
SPWR 32.05 max risk now and still consolidating-like over 33.00
SODA has to hold 18.69 the 50 DMA to confirm the bottom and phase change to recovery
BBRY Reports March 27th before the open Since still bullish on the fundamentals, over 9.90 have a new lower risk trade to recent lows 9.50
DDD Weak reversal pattern since had no big volume, but putting it here so we WATCH carefully for volume to come in and get us involved for a swing trade risk to the recent lows
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
GILD Has negative pivots and 101.10 now close resistance-has to break 98.99 ultimately, but would short with the tight risk ahead of that
GNC 46.84 max risk with support at 44.70 then 42.50 for a mini
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
