As you all well know by now, I have been super focused on interest rates. Last Thursday I wrote that a possible scenario would be to see double or triple the average daily volume on a breakout to new highs inTLTs as one way the blow off top could be in place. That happened on Friday.
Nothing I write here-let me repeat-NOTHING I write here is a signal to trade until it confirms. In other words, same is true for the possible blow off top in TLTs. It could also mean that it was a signal for a continuation to the upside.
However, if you do get a reversal from the new highs on Monday, what does a confirmation in TLTs look like? For starters, if TLTs break 111. But tops do not always happen in one day. Take the example of the blow off top massive volume day in IWM back on March 4th. That took another 4-5 days to materialize.
And since we are on the topic of IWM (small caps aka Russell 2000), allow me to give current status. After the topping confirmation, it proceeded to fail the 50 DMA, continue its southward move, then test the 200 DMA.
Currently, IWM is holding the 200 DMA but not with any great muster, which means besides continuing to watch rates like an eagle, also keep your eyes here. Another down move beneath 110.60 should yield follow through.
S&P 500 (SPY) 2 ways to look at this-either another effort at the highs that failed or after bad news on Friday, not much of a down move from the highs. Time will tell. Subscribers: Mixed Pivots Positive with QQQ, DIAnegative, SPY slightly positive, IWM positive
Russell 2000 (IWM) 110.60 a really good place to hold or more trouble ahead. Like to see it clear 112.53 as a good sign
Dow (DIA) Pretty much same scenario as the SPY
Nasdaq (QQQ) Clearest place to watch is the 50 DMA which it has not cleared yet. Is it muscling up to take it out, or was that the test? Again, time will tell.
XLF (Financials) Holding the 50 DMA so yet another place to look-maybe we should make a list of signals to watch-from indices to sectors.
SMH (Semiconductors) In that list, this is a negative as it closed the week in a warning phase.
IYT (Transportation) 137.25 a good place to see this defend if we are listing setups
IBB (Biotechnology) 222.30 the 200 DMA here to hold
XRT (Retail) Doji day hold of the 200 DMA but under the 50 DMA-another one for the list to see which moving average it clears or breaks first
IYR (Real Estate) Looks good to 70.50 level is what I wrote last week-Friday high 70.52
XHB (Homebuilders) Cleared the 200 DMA-that is a positive
GLD Ran to the 200 DMA-will be real interesting to see what it does from here
USO (US Oil Fund) When I look at the weekly chart it looks good, provided it holds 35.98
XOP (Oil and Gas Exploration) Certainly holding near the highs
IFN (India Fund Inc.) Subscribers: 2nd best performing country fund on Friday and now back over the 10 DMA
CORN (Corn) Subscribers: The right stop is under the 50 DMA and if holds it, could be another time to enter
BAL (Cotton) Subscribers: right up to the 200 weekly moving average-worth watching
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)
**NOTE: For now, prefer miniswing trades, ½ positions which means less risk, quicker profits until the market has more clarity.
WFC Maybe over 50.00 will get me more interested but it is holding
ATI Look for an Opening Range Reversal to control risk ideally as this crossed the 200 weekly moving average first time since 2012
STLD if holds Friday’s low improved in condition with overhead resistance but still a decent setup
PLD Marginally held the 50 DMA with our ½ position only a reason to add if clears 41.50 at this point. Should hold 40.36
Category 4: (Rip Tide) N/A
Phase Change:
JBLU Like over 8.25 with risk to 7.98 area
ANF Inside day over the 200 DMA yet under the 50 DMA. Has a trendline that will clear over Friday’s high
AFL Testing the 200 DMA and over Friday’s high not bad with risk to Friday’s low and possible run to 64 and beyond.
Shorts:
Category 6: White Cap-Having a 2-3 Day correction over the pivots.. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s lows
CERN Under S1 still works with a stop over Friday’s high
Bye For Now!
