I feel like the market looks-upbeat but a bit tired. Upbeat because the sectors I have been watching are holding up. Tired, because it seems that the prices in those sectors haven’t moved much as if waiting for either the Red Bull to kick in or the chlorophyll to take effect.
For starters, Semiconductors (SMH) are holding between key support around 57.00 and key resistance 57.75. The Financials (XLF) look similar between support at 24.00 and resistance 24.60.
The indices, especially my fave Russell 2000, need a push back over 123 to get its fire going and NASDAQ has a line in the sand now at 108.
That at least gives us some parameters as we head into the final day of the week.
Other than that, I have spent a good deal of time this week researching physicsand the relevancy to the market for a book I am working on. Point is, I have found myself relearning Newton’s Laws of Motion considering that topic slipped from my long term memory years ago. In short, since an object in motion stays in motion, we could surmise that the upward motion of the overall market should continue. However, what stops the forward motion of an object is an equally strong opposing force. Or what I refer to lately as wolves.
Therefore, using volume as representative of the opposing force, since that has lacked big time so far this week, watch to see which side volume comes inon-pedal to the metal on the superhighway to new highs or acceleration into a brick wall.
S&P 500 (SPY) Held the channel high and needs to clear 211.17 Subscribers:Positive Pivots in all
Russell 2000 (IWM) 123 is the number for a long with fairly tight risk
Dow (DIA) Over 181.50 clears the 10 DMA and 180 remains key support
Nasdaq (QQQ) Held 108 key support but now, needs to clear Thursday high
XLF (Financials) Key points are the 50 Daily Moving Average at 24.15, the highs since the 02/02 at 24.60 and finally, 24.90-the 6-month January Calendar Range high.
KRE (Regional Banks) 40.00 pivotal now with 41.06 the January Calendar Range High to clear
SMH (Semiconductors) Over 57.75 better but otherwise, look at 56.00 support
IYT (Transportation) Inside day. Holding the 50 DMA for now which is a good thing
IBB (Biotechnology) “I want to pump you up.”
XRT (Retail) Although confirmed a reversal top, held on rather impressively
GLD (Gold Trust) 115 hangs on the balance
GDX (Gold Miners) 20.00 the major support at this point to hold
USO (US Oil Fund) Confirmed the Recovery Phase but with no volume to speak of
UNG (US NatGas Fund) As per request, I see good basing action support at 13.00 with the 50 DMA the area to clear now for 2 days with volume in order to see more upside
TAN (Guggenheim Solar Energy) I’m speechless (and still lightly long from 33.00)
TBT (Ultrashort Lehman 20+ Year Treasuries) Through 45.75 see 47.25 next resistance
UUP (Dollar Bull) About to book my European vacation
IFN (India Fund Inc.) Looks like it’s trying for new highs
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:
BKD Inside day. Classic condition 1 now with a move over today’s high risk more for a swing
CIEN Reported so worth watching over 21.00 if holds 20.50
MNST Now, 137.72 is the risk with a move over 141.33 clearing R1-you can do this for a swing
CSC Should hold 69.00 max risk with a move over 70.22 clearing R1 for a swing.
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)
MRVL 16.50 pivotal and ok to do an ORR
TOL If 37.00 holds and it clears today’s high might see a return to 39.00 or higher so a miniswing best
AVGO Think I prefer an ORR now
EA If holds 57.00 still in gear for a miniswing
WFM If holds 55.70 level then like it over today’s highs for a swing or mini
Category 4: N/A
Phase Change:
NOTE: Watch JOY to see if the slingshot turns to an island bottom
GE Cleared back over the 200 DMA with perfect to today’s low-should clear 25.88 R1
FDX Over R1 clears the 50 DMA, thinking day to miniswing trade as short float could be high
PNRA If holds 159.82 the 200 DMA still like the possibilities to 167
SLB Inside day. Waiting to add over 85.70 with risk for all at 83.16
Shorts: MPEL NBL SWI
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
TIF Looks heavy with last big support at 85.15 after inside day today
Category 6:N/A
Best Best wishes for your trading,
Michele Schneider
