I began this week thinking that investors would be satisfied by the end of this week if NASDAQ put some distance between it and the 50 DMA and the small caps cleared the 200 DMA (or at least looks like they want to).
So far so good. However, this market brings up the famous tale of “The Boy Who Cried Wolf”. For those unfamiliar, a young lad who is bored calls out several times that his flock of sheep are in danger from a wolf attack, which in turn gets adults to run to the rescue, only to find out there is no wolf. Of course, the adults stop coming to his recue and naturally, the sheep wind up getting attacked by a wolf.
Perhaps, the same allegory applies. The market screams, “Rally to new highs”, then fails once too often. Then finally, the rally comes and few are there to prosper from it.
In the world of rates and FED double talk, Thursday saw them firm just a bit-again; but, the jury is still out. I continue to believe a true market rally will be accompanied by a declining TLT.
In the meantime, one more day before a holiday weekend and expectations are for a slooooow one.
S&P 500 (SPY) Calling 188.70 pivotal. Do you remember when SPY took out 185 back in end of February and the measured move I wrote about was for a target of 220? Stranger things have happened Subscribers: Positive Pivots in all
Russell 2000 (IWM) Will this take out the 200 DMA and hold 111.35?
Dow (DIA) confirmed bullish phase with the 166 next point to clear
Nasdaq (QQQ) 89.41 turned out resistance but more importantly is the distance holding between it and the 50 DMA
XLF (Financials) Tested 22.00 but closed just shy of it-and so, we cry “wolf!”
SMH (Semiconductors) A start and now has to hold 44.87
IYT (Transportation) New high close
IBB (Biotechnology) better and over the 50 DMA so now has to hold and clear 237
XRT (Retail) Another wolf for now
IYR (Real Estate) Maybe running out of energy-and time for a correction-which could be a sign for firmer rates
ITB (US Home Construction) Good move today
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
OIH (Oil Services) Like this better now too
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 112.35 the fast moving average-and now pivotal
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) Subscribers: An ORR would be good for risk to today’s lows
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)N/A
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)
Only picks are those I would consider on a Friday ahead of a long weekend that we can take home
WFC Over 50 on the close, now, a good open should be watch maybe even for a 5 minute entry with a risk to 49.42
INTC Has not closed above the 10 DMA since a month ago. Peeked its head through it. If holds today’s lows good
KORS ORR good for a low risk weekend trade
GCI If holds today’s lows then could see a move over 27.92 and a profit target of 30.00 next
JBLU Inside day and if holds 8.79 low risk to see if can clear 8.98 and keep going-perhaps do as a more Miniswng and hold on to balance if runs up-exit if does not
Category 4: (Rip Tide)N/A
Phase Change:
TSLA If clears 50 DMA have a whole new risk based on the setup
REGN If holds the 200 DMA like on an ORR or move over 303.32
BID Long on an ORR but if clears 39.65 will like a lot better and now has to hold 39.00-or I will exit ahead of the weekend
OC Like an ORR now since passed on the breakout with 41.69 the hurdle to clear and 39.94 ultimate support
PM Has to clear 86.90
NKE Like this ove75 or on an ORR against the moving averages
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!
