Dogs Walk In Circles Before Lying Down
Besides a baby, we have four dogs staying with us (2 of which are ours). As I was watching the relatively muted action in the market, the dogs slept: the cliché “let sleeping dogs lie” sounds about right to describe the indices as we head into a long weekend.
The Russell 2000 (IWM) posted 3 doji (when the opening and closing prices are virtually the same) days in a row. Doji’s convey indecision or tug-of-war between buyers and sellers. In this standoff, to uphold the current bullish bias, the Russell’s need further confirmation.
As far as the rest of the Economic Modern Family, they stood divided red and green, yet also united, respecting current trading ranges. XRT IYT SMH IBB KRE.
Interest rates reprieved (TLTs) ahead of Janet Yellen’s scheduled statement Friday. That keeps me primarily focused on the seemingly basing action of the metals and soft commodities as well as the Economic Modern Family.
Currently, Ms. Yellen holds the tug toy in a real way. She has hawks and doves both making a case for holding or raising rates (both with valid points no doubt). Then, she’s got the rest of us, lying at her feet, waiting to play.
S&P 500 (SPY) In spite of it all, a new all-time high close Subscribers: Positive Pivots in all except DIA
Russell 2000 (IWM) Support down to 123.75
Dow (DIA) 182.35 nearest support and over 183 again, should bring it to another new high
Nasdaq (QQQ) Nearly to the top-111.16. Support at 109.25
XLF (Financials) Retreat from 2015 highs makes sense ahead of Yellen statement
KRE (Regional Banks) Low volume after 2 days of better than average-seems like its resting but worth watching to see if holds 42.00
SMH (Semiconductors) Over 58.00 better.
IYT (Transportation) Bounce off of support at 152 but not enough to get excited about unless it clears 154
IBB (Biotechnology) Inside day. Doing its job holding us up-therefore if this quits, not good
XRT (Retail) 99.71 the 50 DMA and almost got to the Promised Land
IYR (Real Estate) Broke the 200 DMA-this group is out of favor for now
ITB (US Home Construction) Inside day just under the 50 DMA
GLD (Gold Trust) 115 key support to hold. Inside day. Better over 117
USO (US Oil Fund) Has more work, but did clear 22.00 and the 10 DMA
TAN (Guggenheim Solar Energy) After the huge drop on five times the average volume, Thursday, it rallied back also on good volume
TBT (Ultrashort Lehman 20+ Year Treasuries) Waiting for some decision on rates
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
EWP (Spain) Good day and move over the 200 DMA
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) Over 18.50 looks good
PHO (Water) New 2015 highs
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 Positive 3, Intermediate-Term Positive 6, andLong-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:
PNRA 2 days under pivots and still looks ok in the new range-risk 184.00 has to clear 187-mini to swing-5 or 30 min OR
PAY 36.78 good risk with a move over 37.20 a good start and over today’s high clears R1 even better. In a range for 2015 so ultimately has to break 38.50 to clear for a move of maybe 8.00-swing Any OR
Category 2:N/A
Category 3: N/A
Category 4:N/A
Phase Change:
IBM Inside day. Looks like its trying if holds 172.50 and clears 174.15 Any OR
FB Inside day. Some call buying today. Like it if holds 79.30 and clears 81.18 the 50 DMA mini to swing Any OR
AWAY Inside day. Like if holds 27.80 and clears R1 28.54 for mini to swing Any OR
EMC Slope on the 50 DMA turned positive. Inside day-like over R1 and must hold 26.35 for day to swing. Any OR
Reversal Trades: N/A
Shorts: Focus list: SBAC
Category 5: N/A
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
