Last week I was all about the marathon runner who hits the wall and either collapses before or at the finish line, or makes it recharged. The Dow collapsed before the finish line and the S&P 500 made an island top. Now, after nursing the stress fracture, we look for some Gatorade-which could come in the form of Ben Bernanke. I also thought about the Life of Pi today. As SPY held the gap low from March 5th, I began to see the boat at risk from storms, sharks and Richard Parker, while remaining afloat with magical islands appearing when needed most. Regardless of fanciful tales and metaphors, trade with caution until the volatility and uncertainty abate.
S&P 500 (SPY) As mentioned, held 153.60 just ticks away from 03/05 gap low. Now, tug of war between island top and that gap. Subs: After 3 days under pivots, we can watch for R1 and today's high which line up
Russell 2000 (IWM) Held the 03/05 low, and then closed above the fast moving average. Small caps are still key to whether or not the bull move of 2013 remains or goes away. Subs: R1 and today's high line up.
Dow (DIA) Also held the fast moving average by end of day. Best case, market worked off overbought conditions. Worse case, the strength of the bull market continues to wane and the 50 DMA becomes a target
NASDAQ 100 (QQQ) Trapped between the fast and the 50 DMA. 67.50 is key to hold and 68.75 the area to break above
ETFs:
GLD 158 is overhead resistance at the 50 DMA and now, 155 the key to hold Subs: White cap trade if breaks S1 using today's high as a risk for short
XLF (Financials) Closed under the fast moving average but seems to be finding some support at 18.00
IBB (Biotechnology) The 03/05 gap low is 152.00 and over today's high a return over the fast moving average
SMH (Semiconductors) 34.75, the 50 DMA magically held. Question is will it continue to. Subs: Held 34.50 where I wanted it to find support. Over R1 and today's high would consider a swing long with risk to under the 50 DMA
XRT (Retail) Range expansion day to the downside and some question whether this selloff reflects the coming negative sentiment from consumers rather than the political news from Cyprus Subs: 69.00 is major support and so far holding
IYT (Transportation) As hard as it would be to buy new highs, seems that is the most logical thing to do rather try to guess where it finds support should market fail some more
IYR (Real Estate) 67.90 the 50 DMA which is still in a strong upward slope
USO (US Oil Fund) Met yesterday's range expansion day with yet another one-albeit red. 33.00 is key support.
OIH (Oil Services) Unconfirmed phase change to weak warning
XLE (Energy) Touched and held the 50 DMA. Will watch the action from here carefully.
TBT (Ultrashort Lehman 20+ Year Treasuries) Back to unconfirmed warning phase, which I find troubling unless it can get back over the 50 DMA
XOP (Oil and Gas Exploration) 59.90 is key support
XHB (Homebuilders) Cleared 30.00 then turned. However, also held the fast moving average so either way it goes from here should be telling
UUP (Dollar Bull) 22.64 key
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:
P Has 4 days under pivots with max risk 13.48 and move over R1 lined up with today's high
PRU Pivots neutral. Outperformed the market and if today's low holds-still pressing against the 80 monthly and if clears, could be good for a run
MOS If holds today's low on the 10 DMA and market firms, could resume move up especially since it is holding the 80 monthly moving average.
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)
WY Held up real well. Through 30.82 clears recent highs then can see move to January high and beyond.
OI Held the 10 DMA making today's low max risk. Still has to clear 27.35 R1 to get to new highs-
BEAM Doji day and still looking for this to continue up. Risk now today's low
EMN Today's low lines up with the 50 DMA. If that holds and this can keep above the pivots, needs to also clear R1 73.64
CVX Max risk today's low and must clear today's high and R1
PX if continues to hold above the 10 DMA, through 114 should see a good rally
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:
AOL Tested the 50 DMA and holding that gap. Doji day. Has to clear R1 34.83
LBTYA Oversold on the 50 DMA and has to hold Monday's low cross R1 and today's high
Phase Change: DDD If holds today's low also holds the slingshot and has one more day-Wednesday to confirm or not. Needs to clear today's high MJN Inside day on the converging moving averages. Now would wait for today's high to clear FB Possible slingshot low if holds yesterday's low with R1 lining up with today's high
Shorts: Not much with a good risk right now
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ALXN Inside day and under the 50 DMA making 94.00 max risk with 92.83 pivotal. 90.00 good first target
FNSR Probably prefer a reversal. Sitting on the 200 DMA after failing the 50 DMA
WYNN Inside day after a few days up. Under S1 breaks the 10 DMA as well
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day's lows
AAPL Today's high is the 50 DMA which means if breaks S1, could be ready to resume down move.
Bye for Now!
