As if the divergence could not get any more spectacular on every level-here’s the breakdown:
S&P 500-Bullish Phase Closed Green
Dow-Bullish Phase Closed Green
NASDAQ-Strong Warning Phase Closed Red
Russell 2000-Distribution Phase-Closed Red
3 phases among the 4 indices!
What about the sectors and groups?
Energies, Natural Gas and Oil-Bullish
Solars: Warning
Semiconductors and Biotechnology: Warning
Real Estate and Transportation: Bullish
Financials: Warning Regional Banks: Distribution
Homebuilders and Retail: Distribution
Silver: Bearish Gold: Distribution
Why do I summarize this? For 2 reasons. First, to specifically illustrate the true nature of a market that has shifted paradigms-little is the same as it ever was.
Secondly, to highlight not only the cross-section, but also the places to look depending upon next overall phase change in the indices-will we sell the mighty or buy the meek? Will we continue to buy the strong and sell the weak? Only the most experienced and flexible traders should know what to do now.
One shift I see with almost 100% confidence-rates-that blow off top in TLTs-still very much in the works.
S&P 500 (SPY) Tested and held the 50 DMA and just about cleared the 10 DMA Subscribers: Pivots Negative in IWM QQQ and Positive in SPY DIA
Russell 2000 (IWM) Possible new reversal candle which would really bring relief in a big way of clears the 200 DMA and holds-and with good volume
Dow (DIA) Tested and held the 50 DMA and cleared the 10 DMA. All these points have to hold
Nasdaq (QQQ) Until this clears the 50 DMA this just is noise
XLF (Financials) Sloppy chart but good comeback
SMH (Semiconductors) 44.80 is where I would like to see clear
IYT (Transportation) Has some overhead, but in good shape comparatively.
IBB (Biotechnology) Look here for a pop over 231. Or poop under 222.84
XRT (Retail) This low has to hold or a real thorn in the side of the market
IYR (Real Estate) New highs-whoo hoo!
GLD As I suspected-weak and should get a whole lot weaker
USO (US Oil Fund) Unconfirmed phase change to bullish
OIH (Oil Services) Near the highs
XLE (Energy) New highs again
XOP (Oil and Gas Exploration) holding near the highs
TBT (Ultrashort Lehman 20+ Year Treasuries) I know I have been looking for a bottom for some time-64.00 has to clear
UUP (Dollar Bull) Subscribers: Possible we could see an island bottom
KRE (Regional Banks) Possible reversal candle
IFN (India Fund Inc.) Subscribers: Sitting on the 50 DMA-last phase of election May 12th
EWP (Spain) Subscribers: Sideways
CORN (Corn) Subscribers: Inside day
SGG (Sugar) Subscribers: Possible brick wall bottom
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:
ADP converging 10 and 50 DMAs-like if holds today’s low and clears today’s high and R1
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)
HUN 25.50 point to clear to like this one again with support at the 10 DMA 25.05
DOW Good reversal and closed on the high of the day. 49.00 good risk area now with another pop over 50.00 good
AON Had a huge range today so now, look for a continuation or reversal against 84.00
PLD 41.26 is the area to clear and do an add then the whole stop can move us a bit
HST Over 21.47 and R1 like with risk to 21.20
BPO 19.82 support with the highs close-20.01
PFG Converging moving averages and cleared all today-reversal or breakout over 46.50 good
Category 4: (Rip Tide) N/A
Phase Change:
TRIP Holding the 200 DMA with today’s low max risk and over 85.00 should see follow through
JCP Reports May 15th. Look for an ORR against 8.35 the 50 DMA
TEVA Cleared back over the 50 DMA and over R1 would be over 50.96 with risk then to the 50 DMA
PM 84.80 is ultimate support and needs to clear 85.96
*TWTR Average volume is 14 million. Tuesday volume was 134 million-today’s volume almost 69 million-and it rose from the lows-could be a brick wall on an oversold instrument in the works
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
STZ Reports May 28th. Looks heavy especially if cannot clear 80.20
Bye For Now!
