Although the market moved up slightly today from the established high end of the range made on May 22ndto the low end in place from this past Tuesday (May 28th), it is still very much “boxed in” in a range. The market remains in a firm bull phase, which is comforting at this point. That doesn’t mean we can’t or won’t see a move to test the underlying 50 day simple moving averages. Likewise, it doesn’t mean we can also take out the highs and keep going. We also cannot discount the possibility that this range will be around for a while as the market remains skeptical concerning the Fed’s back and forth policy on the future of thequantitative easing. Once investors can count more readily on a higher US dollar and higher interest rates rather than lower US dollar and lower interest rates, new trends will emerge. For now, choppy conditions, tough going.
S&P 500 (SPY) Locked under the fast moving average. Range 164-169 Subscribers: Positive Pivots in all indexes
Russell 2000 (IWM) Inside day, which at least should help tomorrow with next direction depending upon the way the range breaks up or down. Closed above the fast moving average-a positive sign
Dow (DIA) 155.14 number to clear. Under 153.48, expect more pressure
NASDAQ 100 (QQQ) Closed over the 10 DMA in its range 73-75.00
ETFs:
GLD Gapped higher, then consolidated in a tight range. Paused at higher levels and probably good to watch to see which way today’s range breaks
XLF (Financials) Although it did not make new highs, it well outperformed again.
IBB (Biotechnology) 179 support and needs to clear recent highs 187
SMH (Semiconductors) New 2013 highs but closed just beneath the intraday high, however, did make a new closing high.
XRT (Retail) 77.00 held for now but now has to clear 78.00 to return confidence
IYT (Transportation) 116 is the number to clear as 113 the number to hold
IYR (Real Estate) Inside day. Well under the 50 DMA and back into the March trading range support
USO (US Oil Fund) Yo-yo up and down the major moving averages
OIH (Oil Services) Still friendly to this unless it fails 43.80 last day of the month
XLE (Energy) 81.00 has been a big area of support and now 84 area to clear
TBT (Ultrashort Lehman 20+ Year Treasuries) After Tuesday’s huge rally, still trading within the range of that big green candle
XOP (Oil and Gas Exploration) Inside day. Friendly here as long as 60.00 holds
UUP (Dollar Bull) Landed on the 50 DMA. Looking to see if this support holds
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:
USG R1 and today’s high line up as this is still in its infancy of the bull phase
GPOR Inside day. Has to hold the 50 DMA at 48.40 and clear R1
Category 2: (Pipeline) N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can eitherbuy 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)
AMZN Holding the 10 DMA. Max risk is S1. Like the market, has good potential.
YELP Inside day and slightly negative pivots. Like that R1 and today’s high line up.
TTM To control risk, 28.00 is the area to hold and watching for an opening range reversal or breakout
INTC Has to clear 24.50
BSX Last day of month and watching to see if this clears the 80 monthly moving average 9.21
MBI 14.00 new risk if this is to continue
NTAP Through 39.00 should continue provided 37.00 holds
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
BEAM Inside day. 66.00 max risk.
IP Inside day. Fave for tomorrow.Island bottom was made here on May 2nd. If that island bottom is good, this should hold today’s low on the 50 DMA and clear R1 and today’s high 49.00 for another 5.00 move up.
PIR Oversold. Right on the 50 DMA with an inside day making 23.26 max risk and like to see some confirmation like R1 to be taken out
Phase Change:
KSS Inside day and has to hold 30.75, but to get excited, must also clear 51.77
FDO Inside day and has to hold 61.79 clear R1
PM Not classic by any means, but has 2 strong bottoms from April and now this week around 91.00 with the 200 DMA underneath. Over R1, looking at a low risk swing trade on this 2013 pick.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
EXPE 58.21 now good risk
MON 105.52 good tight risk and after inside day, has to break S1.
Category 6: N/A
Bye for Now!
