Tour De Force
Over the weekend, I asked the question “Are Russell’s a Rolling Stone?” The basis for that query stemmed from how long it has taken for them to prove they could clear the April highs let alone continue the upward trend.
I further asked, “If IWM Fails the (Modern) Family, What Happens?” After all, the Retail (XRT) struggled to yet could not regain a bullish status all last week. Transportation (IYT) broke 151.25, the weekly moving average, pretty much right out of the gate on Tuesday, and ended the session in an unconfirmed bearish phase.
However, Semiconductors (SMH) and Biotechnology (IBB) held up very well, both maintaining their bullish phases and barely falling from recent highs.
Regional Banks (KRE) respected 41.50, the near-term support and managed to outperform the market.
The Economic Modern Family and the interplay among the 6 relatives continues to fascinate me. It’s as if every time the group decides to take a drive all together, once the minivan shows up, they pile in and then, just before the van goes into drive, at least one of the family pushes on the door handle and falls to the curb.
Nonetheless, since the majority of the family keeps seatbelts fastened, the plan for a fun trip to the mountains stays alive.
Henceforth, while we wait for everyone to finally take a seat and stay put, the range persists. Replace the minivan with a pasture. The family with sheep, the weaker members as sheep sheared, the stronger ones as sheep digesting and in that vein, any selloff a buy opportunity as so far, the strong survives!
S&P 500 (SPY) After 2 inside days last week, it reconciled to the downside, but held the 50 DMA. Over 212 looks better and under 209.50, vacation plans for the family on hold. Subscribers: Negative Pivots in all
Russell 2000 (IWM) 122.00 near term support and over 124.25 back in the driver’s seat
Dow (DIA) Held the 50 DMA with 182 now resistance to clear
Nasdaq (QQQ) Could be forming a double top but for now, seems more like a correction. 108 good support to hold up
XLF (Financials) 24.40 the 50 DMA
KRE (Regional Banks) We are seeing the result of a mini blow off top last week. Now, 41.35 the 50 DMA important support and over 42.25 much better again
SMH (Semiconductors) Held the fast moving average. Over 58.00 definitely the best sign
IYT (Transportation) There’s a gap to 147.39 from October 2014 that could get filled. Weekly moving averages are weighted with a Friday close. So that 151.25 not confirmed unless it cannot clear
IBB (Biotechnology) 353 the 50 DMA to hold
XRT (Retail) Seems like an inverse hammer doji can also translate to a weak sell off on low volume
GLD (Gold Trust) Gapped back under the 50 DMA. Rather see what Silver does now on the 50 DMA.
USO (US Oil Fund) Now that it broke 20, looking to see what happens at 19, the 50 DMA
XOP (Oil and Gas Exploration) As much as I hate to write this, does look like a giant bear flag can be forming
UNG (US NatGas Fund) Held the 50 DMA
TAN (Guggenheim Solar Energy) Like to see what happens at 41.80
TLT (iShares 20+ Year Treasuries) 124 the 200 DMA and 120 support
UUP (Dollar Bull) Cleared the 50 DMA at 25.50
EEM (Emerging Markets) Has to hold 42.00
SGG (Sugar) One ray of hope, if this holds the March 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
***Market Tone: Short-term Negative 4, Intermediate-Term Positive 3, and Long-Term Positive 7. 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 4 days under pivots touching the 10 DMA. 184 now new support to hold and over 186.26 clears R1. Best to wait for a 5 or 30 minute OR mini to swing
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)
CRM Narrow range and inside day. Has negative pivots so has to clear 73.97 R1 and hold 72.45 the 10 DMA. Day to mini. Any OR
GS Inside day negative pivots only risk to S1 max. Like for day to mini over 207.50. 5 or 30 minute OR
Category 4: N/A
Phase Change:
SODA Still like this now over 21.80 but risk can vary. Day risk would be 21.33 mini would be more like today’s low and swing, 20.12. 5 or 30 Min OR
DLR Had a brick wall late April, Now an inside day under the 200 DMA. Has to clear 66.72 and close over to confirm a phase change. Otherwise, has to hold 65.80. Any OR Day to swing
Reversal Trades: N/A
Shorts: Focus List: ULTA
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
UA Warning Phase. Risk to around 78.25 and looks like it can see the 100 DMA at 76.15 and lower if market is weak. Mini to swing Any OR
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
