The Annual Ute Bear Dance, a social dance, is held every spring. Origin of the Bear Dance can be traced back to the fifteenth century when the Spanish first came upon the Ute’s in the spring time. When the first thunder in the spring was heard, it was time for the Bear Dance.
As I looked out my window all day in New Mexico, the rain poured, the thunder roared and the bears danced!
However, the final hour of the trading day, the sun finally came out, just as theS&P 500 held the intraday pivot point, NASDAQ held the 100 daily moving average, the Russell 2000s held Tuesday’s low plus the 6 month calendar range high ending the session with 4 members of my Economic Modern Family, Regional Banks (KRE), Biotechnology (IBB), Transportation (IYT) closing green.
With the tenacity of the Regional Bank sector, and as one who has been bravely touting the bullish forecast in KRE, of course I am asking myself whether KRE is the holdout that will turn out to be the last to know that the bull run is over, or is KRE the beacon of 2015, broadcasting the relentless optimism of the Federal Reserve for an expanding US Economy and it’s resolve to raise rates at some point this year?
In the spirit of our sheep pasture or trading range, these key levels that held up Wednesday in the aforementioned instruments, could stymie the bear dance if they continue to hold up as the market heads into yet another most-important-jobs-report-ever number Friday.
One thing for certain, the increase in rates this week or precipitous drop in theTLTs (20 Year Treasury Long Bonds) did some damage to the overall market. Yet percentagewise, TLTs dropped way more than the Dow did. WhileTLTs made new lows not seen since early December 2014, the Dow has not traded down to 2015 March lows. Simply put, the market is in a trading range while the prospect of higher rates has the market growing accustomed to that face.
S&P 500 (SPY) Confirmed the warning phase but held March lows. Until that breaks, cautiously range bound. Subscribers: Negative Pivots in all
Russell 2000 (IWM) Granddaddy, welcome back! Did you just make a new 60 day low to close on the top of your range? Are you done correcting? Over 121.75 will help. Otherwise, back to the March low 119.83
Dow (DIA) Confirmed the warning phase but held the 100 DMA
Nasdaq (QQQ) 105.45 the 100 DMA support with 107.50 the 50 DMA to clear if good.
XLF (Financials) Warning, Bullish, Warning, Bullish, Warning-forget the 50 DMA here-it’s the 200 DMA that has to hold or not
KRE (Regional Banks) I love this sector-long til I’m wrong
SMH (Semiconductors) confirmed warning phase and held the 100 DMA
IYT (Transportation) 152 support and unless it gets back over 156.34, could see that support
IBB (Biotechnology) 332.26 support with a move over 350, as farfetched as it sounds, much healthier
XRT (Retail) this would be a really good place to hold Granny-otherwise, see 92.50
IYR (Real Estate) New 2015 lows again-not part of the Economic Modern Family, but still not a healthy sign
ITB (US Home Construction) Perhaps a bottom if clears over today’ highs and holds todays lows
GLD (Gold Trust) confirmed phase change to recovery and watching the slope on that 50 DMA
USO (US Oil Fund) Possible high in place for short-term
TAN (Guggenheim Solar Energy) I don’t know about you all, but I am so happy that this has corrected into support for a reentry.
TBT (Ultrashort Lehman 20+ Year Treasuries) Moved right up to the 200 DMA resistance
EWI (Italy) 14.80 huge support
CORN (Corn) Confirmed but really needs more upside to get folks interested-had big volume
BAL (Cotton) Futures look good and even better over 68.00
SGG (Sugar) Cash back over $13.00 interesting
PHO (Water) Closed green on a red day-could be departing from the overall market relationship if continues to hold 25.00
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 Negative 4, Intermediate-Term Positive 1, andLong-Term Positive 6, aggregate makes it a positive 3. We can look for some mini to swing longs that are holding up better. 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 3 closes under the pivots with a move over todays high clearing R1 and the 10 DMA. Risk is 180.00 for a swing. Can do a 5 or 30 Min OR
EXPE 3 days under pivots, held the 10 DMA and now has to hold 98.50 and clear R1 over today’s high. Can do a 5 or 30 Min OR . Miniswing
DE 3 days under pivots, good risk to 88.38 for a swing if clears pivots then R1-can do ½ and ½. 5 and/or 30 Minute OR
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)
AFL Slightly negative pivots. Since held S1 keeping it here especially if it can get back over pivots and stay there after 5 or 30 minute OR Risk today’s low for swing
Category 4:N/A
Phase Change:
FFIV For a big stock has a good swing risk down to the 200 DMA 120.44 and over R1 is in line 123.82
Reversal Trades: (Glass or Brick Wall Bottom or Top):
KORS Reports May 27th Closed over S1 and outperformed the market. Now has to clear R1 over today’s high for a mini to swing trade risk to 62.00
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MON under the moving averages with a gap to fill at 114.97. So for now let’s say day to mini if can’t clear 117.25
QCOM Best risk 69.40 the 50 DMA with an ORR best set up for a mini to swing since more weakness can take this down below the 200 weekly MA
Category 6: N/A
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Best Best wishes for your trading,
Michele Schneider
