“Markets are not stable at all-time closing highs. Assumption-something big is coming. No sell in May, go away kind of event either.” From this weekend.
“Rising interest rates means the cost of money and credit is going up, and if the cost of money and credit is going up — so then must the cost of just about everything else.” Larry Edelson wrote in September 2013.
I quote myself and Mr. Edelson since both statements are now coming to fruition. I have not exactly been shy about why I believed rates had had a second peak last week when the TLTs had a blow off volume top and why I thought that would be good for the market.
Mr. Edelson’s point is that if this is just the beginning of a firming dollar and rising rates, an inflation expectationwill begin to emerge.
And remember, perception is everything, usually about 3-6 months in advance of the news that supports or contradicts it.
S&P 500 (SPY) New highs on low volume with now 189.70 the old high area to defend Subscribers: Positive Pivots in all
Russell 2000 (IWM) Cleared the 200 DMA unconfirmed phase change to warning
Dow (DIA) Gap to new highs that sustained-the “markets are not stable at new highs” comment
Nasdaq (QQQ) Cleared the 50 DMA for an unconfirmed phase change to bullish which now has to hold for a second day
XLF (Financials) The 50 DMA is at 22.01 which cleared putting this back to an unconfirmed phase change to bullish
SMH (Semiconductors) After that inside day, cleared the 50 DMA foran unconfirmed phase change to bullish. That too has to hold with 45.37 level to clear
IYT (Transportation) Opened stronger and kept going to new highs
IBB (Biotechnology) 230 pivotal area and 235 next hurdle
XRT (Retail) An unconfirmed phase change to bullish with the 50 DMA at 84.25
IYR (Real Estate) Still looks great
ITB (US Home Construction) Cleared the 200 DMA
GLD Wedged between the fast and the 200 DMAs-Figure the way this breaks is a good sign for follow through
USO (US Oil Fund) Inside day above the 50 DMA
XLE (Energy) Like the overall market action but not leading at this time
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs now down for 4 days so might see a bit of a short covering correction-but overall, that is a rally to sell into
PHO (Power Shares Water Resources) Marginally cleared the 50 DMA which now has to hold
UUP (Dollar Bull) Subscribers: If FXE gaps lower and does not fill the gap-we will buy US Dollar through this ETF
KRE (Regional Banks) Cleared the 200 DMA
EWP (Spain) Subscribers: Over 42.23 looks good, especially on long term charts
TAN (Guggenheim Solar Energy) Gapped over the 200 DMA wich makes today’s low good point to hold
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)N/A
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)
MPW Passed on the ORR but now, 13.42 is a good tight place to hold for tomorrow.
YUM Holding up well if remains above 75.85 the 50 DMA. Like over R1 76.54
WFC has to clear 50.01 and now hold the 10 DMA 49.45
PLD New risk now is 41.00 and inside day which means has to clear R1 41.55 for new swing
XRX If holds 11.79 then like now for a new swing trade after our cautious exit.
CNX like this one for swing. Cleared the 10 DMA on a gap. Like the gap low as risk and clearing the 80 month moving average
TXT cleared the 50 and 10 DMA and like on an ORR mainly to control risk-really like the long term charts
WMT Negative pivots but good comeback to close over the 10 DMA now a move over R1 79.47 looks good
Category 4: (Rip Tide) N/A
Phase Change:
MBI Reported after the close and if hold 12.20 area, like for a test and perhaps hold over the 50 DMA
A Cleared the 50 DMA but like an ORR best now
AFL One more push over the 200 DMA at 63.44 and could see move to 70.00 area with risk to 63.15
ANF Like this one as it slightly cleared the 50 DMA and a trendline so with follow through, could see 41.00 area next
GOOG ORR only on this
AMPE over 7.30 clears the 200 DMA and will have to hold there to stay in
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
SCTY Now, only if it breaks 50.04
MR Went down today and now under 30.66 could see 25 level
Bye For Now!
