Quiet day to begin this week or dare I say, March, the month that comes in like a lion and goes out like a LAMB?
Speaking of which, lambs are getting closer to my neighborhood. I read today that State wildlife officials say they are cautiously optimistic after counting 15 bighorn lambs in the Santa Catalina Mountains north of Tucson. An Arizona Game and Fish Department spokesman said an effort to rebuild a bighorn sheep herd there looks promising.
If looking for signs or affirmation-well, there you go.
The market, in its continuing ability to entertain, fascinate and rotate-did just that. All indices digested recent gains. NASDAQ seems most potentially vulnerable, especially if breaks down under 108. The Dow and S&P 500 could be getting ready to power up if NASDAQ doesn’t fall apart and the Russell 2000s, if there is ever a place to stall, let it be on new highs with no scary blow off volume or topping reversal patterns.
The rest of the Economic Modern Family played a bit of musical chairs. Transportation IYT went all sheepish again, retreating from its budding role as a new leader into one that sat back but with lots of underlying support. The US dollar decline had a lot to do with that. Biotechnology IBB, after the huge volume last Friday and after making then failing from new highs, had downward follow through. Yet, one should not discount this yet with an underlying, upward sloping 10 DMA to catch it.
Semiconductors SMH posted an inside day, which means 57.88-57.15 is the range to watch for a break either way. The Regional Bank Sector (KRE) rested but looks great to me nevertheless. And Retail XRT did pretty much as we expected, made another new high on the road to parabolic.
Most interesting, after my weekend head’s up on the dangers of being lulled into thinking deflation is here to stay with no possible commodities rally in sight, was the gold, silver, oil, cotton, corn and even the dog of dogs, sugar rally. I wouldn’t brace myself just yet for the rubber band to snap (3-22-15 daily); however, if there is anything to the foretelling, I might consider corking that champagne and going sober this week.
S&P 500 (SPY) Has to clear 211.27 now and hold 208. Subscribers: Positive Pivots in DIA IWM Negative in SPY QQQ
Russell 2000 (IWM) Lets call 123.50 the place to hold should the market get more selling coming in
Dow (DIA) 179 great underlying support
Nasdaq (QQQ) I did start to feel Déjà vu-like looking at the performance of IWM in 2014-it had never cleared to new highs and eventually told the tale for the start of every correction. 108 support, then 106.75 and 109 point to clear
XLF (Financials) Sideways action but we need to see this clear 24.90 to really be in gear!
IYT (Transportation) The underlying support is pretty much right where it landed on Monday-that has to hold.
IBB (Biotechnology) 353.25 is the 10 DMA to hold
XRT (Retail) 99.50 underlying support should this take some rest
ITB (US Home Construction) Inside day but has to close above 27.83
GLD (Gold Trust) Bottoming formation seems to be in place and playing out
GDX (Gold Miners) We will call 20.00 pivotal after the impressive run
USO (US Oil Fund) 17.00 next hurdle with 16.00 the new support
XLE (Energy) Stuck under the 50 DMA and over the 10 DMA
TAN (Guggenheim Solar Energy) If this ever gets a decent dip-buy it
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs enjoying sitting over the 50 DMA-but they are close enough for us to pay attention to should it fail the 50 DMA
UUP (Dollar Bull) The 50 DMA comes in at 25.19
EEM (Emerging Markets) So many country funds look like this one-basing action over January highs
EWW (Mexico) Subscribers: Now, until it takes out the base its been trying to forming since December, will wait
EWG (Germany) Cleared 30.00
EWY (South Korea) Over 58 should continue
RSX (Russia) At his point, has to clear 17.40 and hold
CORN (Corn) Follow through to upside and one more push changes to a more positive phase
BAL (Cotton) Subscribers: Wait for futures to clear the 200 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
***NOTE: We have 13 positions all long on in the model portfolio. We are at margin. Therefore, we have selective picks in case we decide or the market decides, to replace any of our existing positions.
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:
ADSK If holds 60.75 and clears 61.22 like with risk to 60.75
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)
CVS Like if holds 104 and confirms over 104.84 for a daytrade
WFC If holds 55.50 and clears 56.29 like for a day to mini
LVLT Like over PDH
SPWR like if holds 32.74 and clears 33.25
SWI looking for an ORR against 49.84
BKD Neutral pivots like best if can hold 38 and clear 38.62
Category 4: N/A
Phase Change: Focus List
BAX An ORR against the 10 DMA at 67.95 looks best for an entry
TEX Like for an ORR against 26.60
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CMI Under all moving averages-max risk 139.25 or miniswing setup
DISH 75 max risk with under Monday’s low good; some support at 72.18
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
