Highlights from last week include-midterm elections and the anticipated market movers based on perception-Oil and Gas moved higher whileBiotechnology and Solar Energy dropped-market on new highs but withNASDAQ and the Small Caps lagging, good unemployment numbers, yet barely a budge in the Labor Participation Rate. Finally, Phil Rudd, the drummer of AC/DC skirted the Highway to Hell when charges of attempting to procure a murder were dropped.
As the market made new highs, the number of stocks above key short-term (10 DMA) moving averages diminished. However, the number over 50 and 200 DMAs increased. Metaphorically speaking, the market showed signs of fatigue, but overall, the immune system remains robust. The Doctor prescribes Viagra and hopes the results last way longer than 4 hours!
We will be looking for follow through or lack thereof in Agricultural Commodities for starters-(MOO) the ETF closed well over the 200 DMA. We will also look for follow through in the oil, gas and metals. Silver did not quite give us an island bottom, but it did close over $15.00. Uranium exploded (pun intended) soaring over 12% on Friday.
Perhaps the best place to look as this week begins will be the Russell 2000s. It seems the consolidation and number of days in its current holding pattern might be the gift that keeps on giving once that consolidation clears up or down.
Over the last several months, we have witnessed pretty much all of my absolute favorite technical patterns, (Blow off Volume, Island Bottoms, Shooting Stars, and Brick Wall Bottoms). All did exactly as the textbook definition tells us they should do. Now, here’s to IWM (Small Caps) setting up for 2 more of my faves-Inverted Head and Shoulders bottom on the daily going back to August (left shoulder) and, a breakout of a 6 session consolidation pattern, which should fuel it to clear 117.80 and retest 120 area-close to the 2014 highs (at least).
“There cannot be a crisis next week. My schedule is already full.”
Henry A. Kissinger
S&P 500 (SPY) Unless the bizarre happens, the close on new highs after the 3 shooting stars patterns, should be good, unless it breaks 200. Subscribers:Positive Pivots in all
Russell 2000 (IWM) Over 117.80 brings it to the Promised Land and has to hold 115.20
Dow (DIA) Overbought which partially explains my interest now in IWM
Nasdaq (QQQ) Needs to clear 102.03 and hold 100.60
XLF (Financials) Consolidation near the highs
KRE (Regional Banks) Nearly closed over 40.43 –now a great place for this to begin this week
SMH (Semiconductors) Semis are not needed at this party, but, still like to see them clear 52.00
IYT (Transportation) Truckin”
IBB (Biotechnology) Not a great weekly close. 280 support and over 293.64, a better shot
XRT (Retail) New highs-that’s more like it!
IYR (Real Estate) Tired sector-rather look elsewhere now for sparks
ITB (US Home Construction) Decent follow through off the 200 DMA
GLD (Gold Trust) A gap over 113.75 would surprise a lot of shorts
USO (US Oil Fund) Not nearly as pretty as Natural Gas
OIH (Oil Services) A better confirmation of a bottom would be clearing 46.00
XOP (Oil and Gas Exploration) Inside days and their importance played out Friday after it had one on Thursday. Now, 62.00 next hurdle
FCG (First Trust ISE Reserve NatGas) Over 15.81 should have more
TAN (Guggenheim Solar Energy) Subscribers: Held 36 which is my area of support. However, glad to be flat for now
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs back near the 120 pivotal area
UUP (Dollar Bull) Ran into resistance with 23.00 now the support
IFN (India Fund Inc.) Wrote last week this look poised-and so it was-closed on new highs for the year
EWW (Mexico) Subscribers: Inside day which means eyes here for Monday over 67.75
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:
AFSI Inside day with 48.75 max risk. Like over Friday’s highs to see if has power to get through 52.40
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)
CENX Hasn’t closed over R1 since 10/30-now over 28.55 clears R1 with risk to 27.90 now for a miniswing
XPO Inside day and if clears the 10, Friday’s high and R1 risk is good to 37.29 for swing
AAPL Quiet but strong day. If holds 107.50 and clears109.36, still has more room-miniswing
ULTA Inside day near the highs. 120 max risk and has to clear123.74 the recent highs to run
NWL Inside day with great risk to 34.19 for swing or 34.38 for mini if clears 35.00
Category 4: N/A
Phase Change:
GLPI 31.55 big support-like on an ORR but over 32.50 looks great too
TEX Keep an eye on this over 30.00
EXPE Confirmed phase change to bullish and now, 86.74 is the big resistance to clear for a home run
X If holds around 37.50, could get some spark to clear 37.90 the 10 DMA then 38.38 the 50 DMA
HPQ Reports 11/25 Ended the week near the highs with an inside day. 35.80 risk and over 36.42 looks good
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
TWC Unconfirmed warning phase with converging moving averages. Under 142.57 breaks the 200 DMA and would consider for a swing
PSX Consolidating under the 10 DMA at 76.30. Has to break 74.50
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
