I wonder how many are caught by surprise that the idea of the Federal Reserve backing away from bond buying and a strong US dollar would lead to the market making yet another new high. Defies logic, some would say; but whose logic? We saw the FED’s musings as an opportunity to shop in the riper sectors like Financials, Transportation and Retail. But, as it turned out, traders could have shopped pretty much anywhere with a few notable exceptions-gold, Apple, oil. So what now? The Runaway gap featured as a powerful chart pattern back on May 3rd has been amazing. The Russell 2000 got to the target I have been writing about as well as the Dow, S&P 500 and NASDAQ –or close enough. Of course, profit taking is never a bad idea, making sure core positions are left on to run their course. It may also be time to start thinking about a hedge if actively long. One place to look at is VXX (The Implied Volatility of the S&P 500 Index.) That is at historical lows.
S&P 500 (SPY) Got to the top of a weekly Bollinger Band. Could mean nothing since the momentum is still quite strong. At the very least, anyone late to the party-well, you’re late! Subscribers: Positive Pivots in all indexes
Russell 2000 (IWM) 97-98.00 was my reasonable target with today’s high 98.03.
Dow (DIA) Got to a target today. Now, there is a big difference in predicting a top versus knowing when the risk is crazy. Yup, the latter.
NASDAQ 100 (QQQ) 74.00 a target with today’s high 73.74. But no reason 77-80.00 not in the cards only AAPL might make that harder to achieve.
ETFs:
GLD Is it me or did this put in an okay performance considering how crushed it should have been? Of course, that’s a relative thought as it is in a bear phase after all.
XLF (Financials) 19.35 now support to hold
IBB (Biotechnology) What’s higher than 100% overbought on the weekly relative strength indicator? Like Spinal Tap can we get that amp to 11?
SMH (Semiconductors) 2 day correction with 38.00 support Subscribers: 2 days under pivots with R1 and today’s high lining up
IYT (Transportation) 116 target for now.
IYR (Real Estate) Housing starts coming up later this week
USO (US Oil Fund) Subscribers: 4 days under pivots which means a move back over 33.65 the 200 DMA also lines up with the FTPs
OIH (Oil Services) 45.12 is the 2013 high and if clears, a very bullish sign
XLE (Energy) Through 81.00 with little pain
TBT (Ultrashort Lehman 20+ Year Treasuries) WOW
XOP (Oil and Gas Exploration) 60.00 resistance cleared today breaking the lower highs pattern established this year Subscribers: 60.85 next point to clear
UUP (Dollar Bull) Made a new 2013 high today-22.90 area next resistance
UNG (United States Natural Gas Fund) Subscribers: Watching the 50 DMA
SGG (Sugar ETF) Subscribers: Out of the trade today-the strong dollar was too much for it
RSX (Russia) Subscribers: 4 day correction with today’s low a good risk should this clear R1 27.39
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
**NOTE: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.)
NOTE: KSS reports May 16th
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:
STLD Wedged between the 10 and 50 DMA with several days negative pivots. Through 15.30 clears R1 and has to hold 15.10
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)
MJN Improved to a condition 1 today making 80.00 a reasonable risk on an Opening range reversal
CAM 63.00 is good support to hold and has clear today’s high or over R1 to keep going to 65.00 next resistance
YELP Inside day and compressed against the 10 DMA now good risk 30.34. Had a slingshot high, but hasn’t really sold off so not too worried if risk is good. Could see new highs regardless
NOW Imported in condition. Has to hold today’s low
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:
CNX Down today with 33.30 the 50 DMA max risk. If holds 33.90 the pivots, worth a look but also needs to clear R1
Phase Change:
JPM cleared 50.00 which now has to hold
NOV In recovery phase provided 67.50 holds. 68.26 has to clear
AEM Held the slingshot low. All about 29.84 and if it can clear 31.15
USG ORR only
PHH Cleared the 200 DMA at 20.74, now a good risk with the 50 DMA overhead making an ORR preferable
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AOL Prefer an Opening Range Reversal against 38.25 to control risk and support at 34.00
IBM Underperformed with 203.90 max risk. Has to break the 200 DMA soon or around 200
Bye for Now!
