Trip To The Bountiful
Everyone in my Economic Modern Family took a seat in the minivan on Wednesday, fastened their seatbelts and shifted into drive.
So far this year, every time our family decides to take a drive all together, they pile into the minivan and just as the trip to the bountiful ensues, at least one of the family pushes on the door handle and falls to the curb.
Wednesday though, all 6: The Russell 2000s (IWM), Retail (XRT), Semiconductors (SMH), Biotechnology (IBB), Regional Banks (KRE) andTransportation (IYT) could be heard yelling “Road Trip!!” Note-Semiconductors traded higher than it’s been since 2000! Forget minivan, Semi’s got himself a Ferrari Daytona!
Will they hit a roadblock?
In the film, Trip to The Bountiful, an elderly woman seeks to find her old village which she remembers as small, rural and agriculturally thriving. Once she gets there, the village is deserted and the houses that remain are derelict.
Grandma Retail (XRT) could be our elderly lady. She still has one hand on the seatbelt ready to unfasten just in case. Fairly far from the 50 DMA, Retail under 98.00 abides warning. Transportation (IYT) along with Retail, posted an inside day (trading within the range of the day prior). Trannies still have time though to prove that its correction is over, with a close for the week above 151.60.
The Dow (DIA) could emerge as yet another detour for our happy family. Although it is holding above the 50 DMA, it traded inside the range of Tuesday and could not clear the fast (10) Daily Moving Average.
The Minivan; Just Another Sheep Pasture?
True, with the performance in Semiconductors, the odds are now way more in favor of “a family that plays together” can also move mountains together. Yet, let’s not forget, this is the Year of the Sheep.
We have as frequently watched a solo sheep sprinter bust out of the gate(SMH), as we have watched a sheared sheep head out to slaughter-Michael Kors(KORS) down 24%. While SPY, with the narrowest trading range for the year since 1928, remains quietly grazing as usual.
S&P 500 (SPY) Has not had a single 2% up day in 2015 (first time since 2005), fared ok Wednesday. Now, we are back looking at 213.78, the 2015 high as the point to clear. Subscribers: Positive Pivots in all
Russell 2000 (IWM) Back to an unconfirmed Bullish Phase if holds above 124.27 will confirm.
Dow (DIA) 182 resistance to clear
Nasdaq (QQQ) came within 8 cents of negating the possible double top pattern we began this week concerned with.
XLF (Financials) Average volume with 24.90 the next point to clear and 24.45 point to hold
KRE (Regional Banks) There is a reason this is in the Economic Modern Family. Remains one of my favorite sectors-active model has been holding since February
SMH (Semiconductors) Avago Technologies took this higher.
IYT (Transportation) Inside day
IBB (Biotechnology) 370 next hurdle
XRT (Retail) Smaller range and inside day. Range to break 99.70 upside, 98.00 downside
IYR (Real Estate) Inside day under the 200 DMA-over 76.41 clears it
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 19.05, the 50 DMA
XOP (Oil and Gas Exploration) Unless clears 51.65 could be 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 41.90
TLT (iShares 20+ Year Treasuries) 124 the 200 DMA and 120.25 support
UUP (Dollar Bull) The 50 DMA at 25.50
EEM (Emerging Markets) At first failed and then closed over 42.00
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 2, Intermediate-Term Positive 6, andLong-Term Positive 8. NOTE: Market Tone is updated before the open each day and reported to you on twitter.
Category 1:N/A
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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 5 days under pivots touching the 10 DMA. 180 support to hold and over 185.26 clears R1. Best to wait for a 5 or 30 minute OR mini to swing
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 Has to hold 72.69 and good for any OR. Day to mini.
BKD Inside day. If holds today’s low, max risk, and clears 37.65 R1, like for a mini to hybrid swing. Any OR
KMX 72.15 good tight risk. Over 73.20 clears some congestion. Any OR Like best for mini
Category 4: N/A
Phase Change:
SODA Still like this now over 21.75 but risk can vary. Day risk would be 21.28 mini would be more like today’s low and swing, 20.12. 5 or 30 Min OR
DLR Had a brick wall late April. Has to clear 66.72 and close over to confirm a phase change. Otherwise, has to hold 65.80. Any OR Day to swing
X Over R1 clears the 50 DMA at 24.93. Like risk to 24.26 for mini or under 23.20 for swing Any OR
Reversal Trades: N/A
Shorts: Focus List DKS
Category 5: N/A
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
