Like a Treasure Map, the market left a big clue to the prize-for Monday anyway, when the Volatility Index,what I kept writing about last week into this one, blew out on the Ukraine story.
I do not mean to crow, rather, to educate and direct my readers to looking at such signs to help protect you all from possible disaster.
Now, the Dow, which threatened the 50 DMA all day, closed above it. Furthermore, my other tell, the small caps or Russell 2000s, closed green. In fact, all sectors stayed in their current phase with one exception-Financials-they closed on the cusp of the 50 DMA.
Looking ahead, given a couple of decent economic indicators that were muted by Putin, if the situation ameliorates, some great opportunities just emerged. Otherwise, while the market remains news sensitive best to keep eyes out on indicators like volatility and phase changes.
S&P 500 (SPY) Distribution day in volume with a test and closed just above the fast moving average. 185.66 and above puts this back in the game Subscribers: Negative pivots in all
Russell 2000 (IWM) Gapped down but filled the gap which is a good thing. Also held the 10 DMA. Therefore, 117.60 becomes the area to penetrate
Dow (DIA) Watch that 50 DMA
Nasdaq (QQQ) If I didn’t know what was going on in the world, I would say this was a healthy correction
XLF (Financials) Unconfirmed warning phase
SMH (Semiconductors) Barely a move down
IYT (Transportation) Hung onto the 50 DMA
IBB (Biotechnology) Can never dismiss this group and could be setting up for a new buy
XRT (Retail) Amazingly held the 50 DMA-see an opportunity here
IYR (Real Estate) This is not done-good for a shorter term trade
XHB (Homebuilders) As long as gaps were filled after the open )this did) then still a contender
GLD Gapped higher now has to hold it
USO (US Oil Fund) I knew this would break 37.50-now it has
XOP (Oil and Gas Exploration) Like OIH XLE this one had a doji inverted hammer which means they all look like they were forced down
TBT (Ultrashort Lehman 20+ Year Treasuries) Oversold big time
UUP (Dollar Bull) Possible brick wall bottom
EEM (Emerging Markets) Subscribers: Here’s one that gapped down and did not fill the gap
CORN (Corn) Subscribers: Nice doji candle on the higher action clearing 32.50
BAL (Cotton) Subscribers: Looking a whole lot better
JO (Coffee) Subscribers: WOW
SGG (Sugar) Subscribers: Big eyes here with the digestion over 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
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:
SCTY Has to clear R1 and hold today’s lows
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)
CNQ 36.30 is good tight risk with a mover over 37.03 good-still in play
CNX 2Inside days with risk to Friday low and over 40.21 good
BPO Huge move today and now, has to clear 19.58 has to clear and hold around19.15 area
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:
VMW Not quite oversold, but bounced strong off the 50 DMA and one more push will get it over the 10 DMA. Risk will be somewhere around 94.00
Phase Change:
ROST 70.30 is the big support but can use 70.90 as well with a move over 72.97 clearing today’s high and R1
OAS Cleared the 200 DMA. If holds 44.12 area, then could have lots of room up
RKUS Still in play if holds today’s low
AFL Have a small miniswing position which we might keep for a hybrid to swing. Confirmed the phase change
AXL Amazing amount of congestion-has to clear 19.86
JCP Wish I had been watching today since it was perfect holding the 50 DMA and having a breakout over the 30 minute opening range. Now, have to do this only if we think it can clear above the gap at 8.15 and keep going.
Shorts:
VXX Plan No Loss Stop Now
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CELG Has to break S1.
Bye For Now!
