The market responded well to what sounded like double talk to me. Fed: “We can stimulate to improve the employment number without spiking inflation” The other Fed: “We will begin weighing options to raise rates, pull back stimulus.”
We all know this has been a contrarian market, so cheering about a well-endowed day might be like admiring a fake pair.
NASDAQ managed to close above a 2 month high so that’s a relief especially that it is NASDAQ. The small caps held the critical 108 level yet, requires more muscle to clear the 200 DMA.
S&P 500 cleared 188.79, diminishing the impact of those topping candles and DIA went back into an unconfirmed bullish phase.
Semiconductors cleared the 50 DMA with overhead resistance, while Retail improved however not nearly enough and the Financials inched closer to its 50 DMA.
And what about the rates? The TLTs broke and closed beneath the fast DMA but still not convincingly enough to warrant a short position. Thursday should be more decisive on how the market ultimately interprets the FED’s bafflegab.
S&P 500 (SPY) Calling 188.79 pivotal Subscribers: Positive Pivots in all
Russell 2000 (IWM) Will this take out and hold 111.35? Inside day so fascinating to see which way the range breaks Thursday
Dow (DIA) Unconfirmed bullish phase with the fast moving average over the Wednesday’s highs and the 50 DMA under Wednesday’s lows
Nasdaq (QQQ) 89.41 next resistance and now, 88.60 pivotal
XLF (Financials) Look here and it seems like a rally into resistance unless clears 22.00
SMH (Semiconductors) Has to clear 45.03 and really hold around 44.75
IYT (Transportation) Inside day near the highs making this a big focal point
IBB (Biotechnology) 2 Inside days and a month of compression!
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-which could be a sign for firmer rates
GLD still just chopping around sideways near all the moving averages so keep looking
USO (US Oil Fund) Will be interesting to see if this can hold 37.55 now
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 112.35 the fast moving average-and now pivotal
PHO (Power Shares Water Resources) Inside day
UUP (Dollar Bull) Bottoming action still in play with 21.50 the elusive resistance
EWP (Spain) Subscribers: Like this again over today’s highs with a new risk to under last week’s low
TAN (Guggenheim Solar Energy) Nice looking reversal candle clearing a moving average. Subscribers: An ORR would be good for risk to today’s lows
FCG (First Trust ISE Reserve NatGas) Subscribers: Look for an ORR here too against the 10 DMA
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:
CNX Rested and now, R1 44.88 with 43.99 level good risk-over the 80 monthly so good wing material
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)
DIS Cleared the 10 DMA and now if holds 80.00 like for an ORR mainly. Long term has good potential still
INTC Has not closed above the 10 DMA since a month ago. Peeked its head through it. If holds today’s lows a fave for tomorrow
KORS Inside day with risk around 91.00 for room and a move over 94 good
GMCR Went the conservative route selling ½ and now with a doji day, want to see it head back up over today’s highs and hold around110.70
Category 4: (Rip Tide) N/A
Phase Change:
BID like the brick wall bottom and the strong volume plus hold of the 23 month moving average. Over 39.45 good place to clear with risk around 1.5 ATRs
PM Great close after holding the 200 DMA at 84.66. Now, look for an ORR or move over 86.90
NKE Compressed and clearing the moving averages which are converging-like if holds today’s lows
NEM 2 inside days affording us a narrow risk to under today’s low and S2 should it clear today’s highs
CIEN If holds around 19.00 still in play with a move possible of about 1 to 1 ½ ATRs or more
CCL At this point has to clear 40.00 and hold 39.00
AMPE 7.37 if holds still in play over today’s highs
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ITW In the search for selling strength, this came up because of its inside day, slingshot high and close under the 10 DMA. Under S1 and today’s low clines up and could see drop to 83.53 the 50 DMA. Risk the 10 DMA
Bye For Now!
