Almost a repeat of Monday only better, the small caps (IWM) continued climbing along with the transportation and financial sectors, while the long bonds continued going south. Traders tend to underestimate the power of Runaway gaps so it is my hope that the definition over the weekend helped to elucidate the move of the last two days. The retail group made new highs along with the homebuilders sector and biotechnology followed through to the downside after the exhaustion gap we saw and also reported about over the weekend. The Oscillators are extended nearing overbought conditions in the S&P 500, but they are yet to show signs of a reversal from the now startling Industrial Average over 15,000! As we continue to reach profit targets, smart money is locking in on this historical move while holding tails and trailing up stops on balances.
S&P 500 (SPY) 161.00 good point to hold with 164 target Subscribers: Pivots positive in all indexes except QQQ
Russell 2000 (IWM) 97-98.00 reasonable target it holds 95.00
Dow (DIA) Certainly eradicated the concerns from Monday’s pause with a beautiful performance today.
NASDAQ 100 (QQQ) Heeding Monday’s warning of not buying at the highs, nor having concern if already long from lower levels, NASDAQ took the needed rest. Subscribers: 71.91 gap low from Friday
ETFs:
GLD Gap lower under the fast moving average, but closed holding the larger gap from 4/25 and held 140.00 a pivotal area with a doji (opening and closing prices nearly identical) day.
XLF (Financials) Approaching some longer term resistance Subscribers: Got pretty close to target of 5 ATRs at 19.38
IBB (Biotechnology) Head’s up on the exhaustion gap left last Friday. Now, getting close to support at 173.40
SMH (Semiconductors) Relative to the other groups, took a rest as it retreats marginally from a channel that goes back 12 years. Subscribers: Any dip to 37.00 is probably a good place for this to reignite from
XRT (Retail) Subscribers: Study the inside day, positive pivots and Opening range reversal setup on this chart.
IYT (Transportation) Hope you rode the transportation train-a group I have loved for quite some time! Subscribers: 116 target
IYR (Real Estate) Good follow through after Monday’s inside day rest
USO (US Oil Fund) Interesting inside day after confirming an improved phase change
OIH (Oil Services) 45.12 is the 2013 high Subscribers: Say hello to the 80 monthly moving average if it stays firm
XLE (Energy) New 2013 high
TBT (Ultrashort Lehman 20+ Year Treasuries) Filled a gap to 62.20 with today’s high 62.24
XOP (Oil and Gas Exploration) 60.00 some resistance Subscribers: Long ½ position
UUP (Dollar Bull) Watching that 200 weekly moving average like a hawk
UNG (United States Natural Gas Fund) Subscribers: Unconfirmed phase change to weak warning so if clears the 50 DMA now, a good risk trade
SGG (Sugar ETF) Subscribers: After a rest, watching to see if it can clear the 50 DMA
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
**NOTE: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.)
**NOTE: BWA FNP URBN PETM IR all outperformed and now approached the overbought mark.
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:
CROX Still long from 15.82 but hasn’t done too much. Now, over 16.21 should get some muscle to clear 16.50 and see higher levels.
LVS Today’s low good risk. Must also clear 57.13 R1 to keep going to 2012 highs
HES 71.73 max risk with a move over 72.50 positive, over today’s high better and over 74.00 better still
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)
NTAP Reports May 21st. Inside day with max risk 34.80. 36.00 some overhead resistance to clear.
AMT Inside day after a correction from the highs with a narrow range and great risk under 82.75. Plus, has positive pivots although prefer to see it clear 83.78 R1
NSC Looks poised if holds 77.75 to run to new highs.
BDX Inside day close to last week’s high and has to clear 97.62 hold today’s low for tightest risk
Category 4: (Rip Tide) N/A
Phase Change:
JPM Unconfirmed phase change back to bullish with max risk 48.26. Like reversal or breakout with a close over 49.50 reason to believe will continue to recent highs and perhaps beyond
KSS Reports May 16th Held the 50 DMA at 47.22 and R1 lines up over today’s high-still a shot
SWC Long on the reversal and holding ½-like it more now over 12.71
STLD Like to see it clear R1 15.41 and hold 14.95 max risk
PM Good move off the 50 DMA but after an inside day, has to clear 94.00
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CRM Reports May 23 42.92 max risk with a move under 42.00 good confirm could see 41.00 or lower
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
CHKP Today’s high max risk and has to break S1-then 47.07 in which case like for a swing short
AGN Today’s low and S1 line up with good risk to 104.95
Bye for Now!
