The small caps look terminal but, they are holding the key point of reversal from May 15th and if Tuesday typifies the 2014 action, Wednesday, we might see an up day-even possibly a move to the 200 DMA and beyond.
And that’s exactly the nutty contrarian talk that lately does not sound so nutty.
NASDAQ held the 50 DMA. I will bet against the small caps, but not here; therefore, I prefer to walk the middle ground-take positions long or short with a wide stop as instruments set up. Furthermore, resist the temptation to buy strength and sell weakness.
Wednesday FED minutes will take center stage. And we all know how calming FED speak has been lately.TLTs still above the fast moving average and of course, still have eyes peeled there.
S&P 500 (SPY) 186.50 the absolute line in the sand. Subscribers: Negative Pivots in all
Russell 2000 (IWM) Besides the perma bears, who doesn’t want to see this take out and hold 111.35? 108.09 good point to hold
Dow (DIA) Unconfirmed warning phase unless it clears back over 163.78 the 50 DMA
Nasdaq (QQQ) A hold and close above 88.61 will be a first since early April. Otherwise, 87.40 big area of support to hold
XLF (Financials) Still a bit far from the 50 DMA and closer to support
SMH (Semiconductors) Has to clear 45.03 and really hold around today’s lows
IYT (Transportation) Digestions and still looks ok
IBB (Biotechnology) Inside day
XRT (Retail) A huge thorn in the side of the market-81.46 must hold
IYR (Real Estate) Maybe running out of energy-and time for a correction
GLD still just chopping around sideways near all the moving averages so keep looking
USO (US Oil Fund) If this can fill the gap to 37.55 and continue looks really good
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 112.35 the fast moving average
UUP (Dollar Bull) Bottoming action still in play with 21.50 the elusive resistance
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:
GMCR If holds 110.70 good risk with R1 114.75 to clear-could see move up over 120
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)
CNX Neutral pivots inside day. Like more for a mini to hybrid trade if holds 43.93
IPG small stock but over 18.04 takes out highs since 2002 for a miniswing to hybrid with risk to around 17.75
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:
Phase Change:
AGO If holds todays low, holds the 50 DMA and over 25.40 looks better
NEM Held lows recently from back in 2008 and now, closed inside day an holding an older slingshot low. Risk 23.25 area and like over R1 23.77
SWI Over the 200 DMA 38.85 good place to confirm recent brick wall bottom in a growth area-risk is 37.75 area
CIEN Inside day and good risk to around 18.85 should it clear 19.45
CCL Held onto the support at 39.03 therefore still in play for a possible long with risk 38.88
JCI Holding over the 50 and 200 DMAs best risk is under 46.10 for a more miniswing trade
AMPE Inside day with better entry now over 7.84 with risk to yesterday’s low 7.21
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
OXY Under 95.32 risk now over today’s low-Target is for this to break 83.22 and head further south-way down the road.
Bye For Now!
