Like counting sheep-here are the thoughts in my head each night:
After an initial scare, most major bull markets in U.S. equities also occurred during periods of rising interest rates, which of course hasn’t really happened yet, (market seems to be more scared of falling rates right now) and we are still working on a second swing high in TLTs from last week.
Since the market hasn’t really had a correction-could this diversion be that there is no correction and the market will power up to 2000? Is this the start of a bigger correction? Will we just trade range bound until there is some other watershed event?
Then there is the volatility index-today, Tuesday it made yet another new low and then turned to close near the intraday high. Big eyes there Wednesday for clues (and low risk trade) or perhaps complacent folks waking up.
Before we get hysterical, the small caps aka The Other Sister, had an inside day above the 200 DMA. Low volume all around-could just be digestion.
S&P 500 (SPY) New highs and a doji day by the end of the session. Will 189.70 hold or will it drop again to 188.35 Subscribers: Positive Pivots in all except IWM
Russell 2000 (IWM) Inside day over the 200 DMA at 110.80
Dow (DIA) Possible shooting star-reversal or launching pad
Nasdaq (QQQ) Cleared the 50 DMA for an confirmed phase change to bullish which means 87.90 is key support
XLF (Financials) confirmed phase change to bullish
SMH (Semiconductors) Ugly confirmation of a bullish phase
IYT (Transportation) Expect digestion form here and not necessarily anything more than that
IBB (Biotechnology) 230 pivotal area and 235 next hurdle
XRT (Retail) confirmed phase change to bullish with the 50 DMA at 84.25
IYR (Real Estate) Possible reversal from new highs-70.60 is the fast moving average
GLD Incredible amount of time in a range which at some point, will break one way or another
USO (US Oil Fund) looks good-let’s see what it does at 36.75
XLE (Energy) Doesn’t look done moving up
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs corrected as I thought it might and just touched into resistance
UUP (Dollar Bull) Up so much last several days, now at resistance levels
KRE (Regional Banks) Inside day and still vulnerable
IFN (India Fund Inc.) 23.49 the 2014 high
EWP (Spain) Subscribers: Over 42.23 looks good, especially on long term charts
SGG (Sugar) Subscribers: In futures, a weekly close over 18.35 is strong
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 Negative pivots but over 13.55 still looks promising
YUM Like today’s action especially now if holds today’s low
WFC has to clear 50.01 and now hold the 10 DMA 49.45
PLD Leaving this here and has to hold 40.82
XRX Long range great although risk is getting far
TXT Had the reversal but was lackluster-now keep eyes on this for a miniswing trade
WMT Reports May 15-just mentioning so we don’t lose track
Category 4: (Rip Tide) N/A
Phase Change:
ANF Confirmed the bull phase and over 39 should go more
TEVA Like better on a reversal ORR against the 50 DMA now
FB After a slingshot low, held the 10 DMA 59.22 the max risk.
NFLX A doji on the 200 DMA-if holds today’s lows, could be good to 368 the 50 DMA for now
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
QIHU Could see 70 next if cannot clear 83.55.
Category 6: White Cap-Having a 2-3 Day correction over the pivots.. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s lows
SCTY If cannot clear 54.93, like under S1 and today’s low which line up
Bye For Now!
