Semiconductors, Transportation, Retail and Homebuilders all did well during Tuesday’s session. The indices drifted and held critical lows. The FED taper talk had an initial impact until the market seemingly said, “Never mind.” The pockets of weakness are in the commodities especially in oil, gold and silver, which are not so bad for this consumer, who loves jewelry and gas guzzling cars. We came into Tuesday’s session looking for volume. Instead, we got more divergence with the S&P 500 holding the fast moving average. The Dow holding the fast moving average yet retreating once again from the top of a channel. The Russell 2000 clearing the fast moving average marginally and NASDAQ not quite there. What was stronger is weaker, what is weaker is stronger-yet all remain in bullish phases-the rotation is noteworthy (watch which index leads up or down on Wednesday), but not majorly significant.
S&P 500 (SPY) Last Thursday’s high still important 177.64. Tuesday low important as well. Subscribers: Negative Pivots in all
Russell 2000 (IWM) Last Thursday’s high is important 109.81, and Tuesday this closed with an inside day
Dow (DIA) Retreated from the channel which can also be a good thing since if it clears, can do so now with more muscle.
Nasdaq (QQQ) 82.70 real big area for this to clear and hold above
XLF (Financials) Weaker today but no real damage unless it breaks to the 50 DMA
SMH (Semiconductors) More like the semis I have come to know and love. Has hurdles, but today was what I was looking for to keep the forecast strong
XRT (Retail) Holding up the market it seems
IYT (Transportation) Gapped and cleared the fast moving average-a good place to be
IBB (Biotechnology) A push above the 50 DMA will help this group a lot. Otherwise, a favorite area for a short
IYR (Real Estate) Oversold and very cheap. Subscribers: Above today’s high will be compelling especially since 63.88 is also the low tick the first week of 2013
XHB (Homebuilders) Unconfirmed phase change to bullish. Subscribers: If not already long, looking a lot better now
GLD Now oversold
XLE (Energy) 85.00 key to hold
XOP (Oil and Gas Exploration) Closed under 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
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)
LVS If 70.00 area holds, still on the radar.
BZH Inside day –really like this one now over 19.76 for a swing risk 18.25
DG More day to miniswing if holds today’s lows and takes out todays’ highs
Category 4: (Rip Tide) N/A
Phase Change:
GGP Inside day and confirmed phase change to accumulation. 20.19 point of risk. Like this for a swing since clearing the 80 monthly moving average
IGT Improved in phase to an confirmed warning phase which means that after Friday’s brick wall pattern this is setup. 17.80 is the 200 DMA and 17.55 max risk with either a reversal or breakout on watch
CYH confirmed recovery phase making 41.33 a good risk for swing if holds and clears the 10 DMA
MAS Like this now on reversal against the 200 DMA best, but wouldn’t discount a buy over 20.60
USG Inside day and back to unconfirmed warning phase. Today’s low max risk, like over 27.05
PM Over 90.07 clears R1 and the 200 DMA for a new swing with risk to whatever tomorrows low is or just under the 200 DMA-whatever is lower
LGF With Hunger Games coming out November 23rd, this had 2 inside days. Like the support at the recent low 30.44 and over today’s high clears R1
VRTX Slingshot low, super oversold and over R1 clears today’s high to confirm slingshot. A perfect day to hybrid swing trade if sets up
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BIDU More daytrade short if cannot clear 153.18. Support at 142.70
CBST If cannot clear today’s high still like this short for possibility to see a move down to the 200 DMA
TEL If cannot clear 52.17, then like for a short to see 51.00 or lower
Bye For Now
