FEH’D
Feh is a Yiddish expression defined as something you say when you are disgusted with something.
A good friend and respected trader tweeted this after the Fed Minutes were released:
“Analyze the Fed statement all u want, only price pays and news and surprises tend to follow the direction of trend.”
Concerning the Federal Reserve, only a few policymakers supported a June rate hike. Since the rates of the 20-Year Treasury Bonds have been firming really since 2015 began when the TLTs hit their zenith, concerning my friend’s quote above, whether the Fed hikes in June or September has less relevancy considering the charts show anticipation that it’s going to occur at some point in the not so distant future.
There are exceptions to the adage that “charts precede the news.” Look at TAN the Solar energy ETF that tanked early on in its very strong bullish trend. The drop came on the heels that the CEO of Hanergy, a Chinese solar company, went missing in action. In this case, news changed the direction of the trend. (Longer term still very friendly to solar energy’s future).
So what does this mean for my Economic Modern Family?
Feh, not that much! Notable is that the Russell 2000 led the charge, although still far from the 2015 highs. Equally notable is that Transportation fell to near April lows. I placed that in the family purposely as a reminder that we still rely on planes, trains and automobiles to transport goods, making it an integral part of how to measure the strength of the economy.
The others (Semiconductors, Biotechnology, Retail), closed green. Regional Banks took a breather after making new 2015 highs.
I added a baby Tuesday night as the family representative of living in the present. Presently, the baby continues to beg for a cookie, and throw it on the ground. That’s because like so many, he still finds it hard to trust a rally. Feh’d!
S&P 500 (SPY) 212 closest support to hold Subscribers: Positive Pivots IWM QQQ and Negative SPY DIA
Russell 2000 (IWM) 124 the 50 DMA if this continue to represent as patriarch
Dow (DIA) New high intraday then red close. 182.40 more of a one day pivotal support line to help assess intraday action for Thursday
Nasdaq (QQQ) Has room to the top-111.16. Support at 109.00
XLF (Financials) Inside day after Tuesday’s performance
KRE (Regional Banks) Seems more digestion at these 2015 highs but what’s strange is the high volume which makes me take notice as potential blow off.
SMH (Semiconductors) Over 58.00 better.
IYT (Transportation) 152 down to 151 key support to hold
IBB (Biotechnology) Doing its job holding us up-therefore if this quits, not good
XRT (Retail) 99.71 the 50 DMA is the Promised Land
IYR (Real Estate) Pausing on the 200 DMA
ITB (US Home Construction) Barely confirmed the bullish phase
GLD (Gold Trust) 115 key support to hold. Inside day. Better over 117
USO (US Oil Fund) Inside day. 18.75 far but best support and over 20.00 stands a better chance to resume up
TAN (Guggenheim Solar Energy) Five times the average volume so we look for signs of a blow off here
TBT (Ultrashort Lehman 20+ Year Treasuries) Feh’d
UUP (Dollar Bull) 25.20 next point to clear and 24.80 point to hold
EEM (Emerging Markets) Still friendly here
IFN (India Fund Inc.) Cleared the 200 DMA and ran up a bit
EWW (Mexico) Worth watching this basing action
EWG (Germany) Looks ripe for higher
FXI (China Large Cap Fund) Runaway gap form April 8th. Still holding
DBC (DB Commodity Index) Inside day. Close to a perfect risk point if dips more or even holds right around here
SGG (Sugar) Hovering around the 50 DMA
PHO (Water) Consolidating
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
***Market Tone: Short-term 0, Intermediate-Term Positive 6, and Long-Term Positive 9. NOTE: Market Tone is updated before the open each day and reported to you on twitter.
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:
EEM gentle step down to the 10 DMA in a bullish phase. Like if holds today’s lows and clears 42.91
GD 4 days under pivots with risk to S1 139.60 tomorrow. Has to clear first pivots at 140.35 then R1. Day to miniswing Any OR
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)
Note about AMZN: We might add some size to the position if clears back over the 10 DMA but then tighten stop and lower profit target. ATR has halved since our entry
PNRA Inside day after the gap over the trading range. New risk 185.31 and has to clear 187.57-any OR
JCP Doji day. Have ½ and will look to add using same stop if clears over 8.76. The number of shares will total the $500 risk to the stop
Category 4: N/A
Phase Change:
IBM 172.50 now support near term. R1 is 174.65 to clear now for a day to mini trade-any OR
FB Over today’s high clears R1 and the 50 DMA. Then, risk is 79.47 for a mini to maybe swing trade-has to be on a 5 or 30 minute OR
TEX Over 28.71 clears the 200 DMA so wait for that and then risk to the low of the day if does-mini to swing. OR any
Reversal Trades: N/A
Shorts: focus list: CREE SBAC
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NSC Risk to 98.41 the 10 DMA and for mini-looks like could see 83.50-82.00 over time. OR-any
COST Reports May 27th Phase change happened now under the 100 DMA. Like if cannot clear 145.24 and any OR is fine for day to mini
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
