I took a 2 day break to see family. Stepping back gives traders a chance to reflect on the market. I left Friday seeing both the good and the bad in the market and clearly, that has not changed much. The small caps (IWM) have switched to becoming the laggard, TBTs (the short bonds) remain out of favor and the financial ETF (XLF) has yet to clear the fast moving average. However, the S&P 500 finally filled the gap from the island top, making it no longer an island. And the Dow, as predicted, with its incredibly close proximity to the all-time high, crept even closer to it with today's action. What keeps traders on the plus side in their P and L is if they can detect then capitalize on the emerging shifts in direction, much like playing the carnival game, the one where must be poised to shoot the plastic duck that pops up next!
S&P 500 (SPY) 156.22 filled the gap from March 14th island top, with today's high 156.23. What that means is that the spike high from that day is less likely to be a top (would have been more likely if it been accompanied by huge volume. Subs: Today's low and the 10 DMA line up making that super important. Not overbought, ready for more upside if that level holds
Russell 2000 (IWM) Choppy in that index right now. Makes sense given its recent position in the back rather than the foreground. Subs: Range now is 93 to 95. In the middle, aside
Dow (DIA) 145.35 is the recent high with high RSIs on the weekly chart
NASDAQ 100 (QQQ) 67.50 (the 50 DMA) is key to hold and 69.00 the area to break above with a very interesting inside day alignment. Subs: Will jump into this for a swing over 69.00 assuming we could get 1.5 to 2 ATRs. Risk under S2.
ETFs: Subs: Some troubling signs in certain sectors: Biotechnology, Transportation and Retail as top 3 concerns
GLD Trading under the fast moving average back in a bearish looking trend. Subs: Today's high and R1 in line which means, either a great short against it, or a good day to mini swing trade long above.
XLF (Financials) Inside day right under the fast moving average. Subs: Over 18.30 could be an add if long or a place for a new long
IBB (Biotechnology) Brick wall high in place with an inside day.
SMH (Semiconductors) Today's action was positive but now, 35.50 is really the place to clear
XRT (Retail) 70.81 is potential double top which is yet another reason I am seeing some real good and some real bad signs.
IYT (Transportation) another inside day under the fast moving average and really, possibly acting a bit toppy.
IYR (Real Estate) A bright spot. 69.35 big point to clear now
USO (US Oil Fund) That bottoming action from early March sure played out with now an unconfirmed phase change to bullish
OIH (Oil Services) Either has to clear the 50 DMA or still has a shot for a possible bear flag forming
XLE (Energy) 79.50 big point to clear
TBT (Ultrashort Lehman 20+ Year Treasuries) One of the main reasons for concern as this is below the 50 DMA until it clears 67.00
XOP (Oil and Gas Exploration) Like to see this close out the week over 61.00 for a new move up
XHB (Homebuilders) Inside day. Not sure what to make of this group here
UUP (Dollar Bull) Pushing and won't be surprised to see this through that 200 weekly moving average
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:
AOL 35.37 is the max risk. With negative pivots should clear R1
MTW Crossing the 80 monthly this month with today's low after an inside day a great risk. Recent high 21.35 which should take this to another leg up. R1 and today's high line up which means a higher open in this, and could be another 5 minute opening range candidate
BEAM Hammer doji after a good correction. Now, could be a brick wall high, but also if can clear 63.00 chances are the uptrend will stick around
ADSK Inside day with max risk 40.26. Like over today's high and R1
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 Inside day with continuing potential if holds today's low
PNRA over 166.45 clears 2 months of work. Risk is S1 and the 10 DMA at 163.67 which totally line up.
P Has to clear 14.00 and hold 13.50
MGM Inside day with max risk 12.97 the 10 DMA. If this can clear 13.60 has room
NSC Recent high 76.26 which if clears looks like a good base on the monthly chart. Like to see 75.00 hold for a new entry
MBT Inside day and slightly negative pivots. 20.30 today' s low good risk. See potential it this if can get over 21.00 soon
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:
MBI 10.27 the 50 DMA with an inside day. Still eyes on
Phase Change: CHKP Potential phase change an d very oversold. One to watch
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
APA Has to break S1 74.06 and not clear 75.00
SINA Down alot today so a reversal would be ideal but, more weakness is ok too since the RSI's are not oversold
ALXN Under the 50 DMA 92.14 and has to stay there.
Bye for Now!
