2 weeks ago, I wrote about 4 scenarios that would have to occur as rocket fuel for the market. One-The Real Estate Sector would have to wake up. Two-The Financial Sector would also have to stay alive. Three-The rates couldn’t firm too fast. Four-The small caps or Russell 2000 would have to negate the topping candles from October 30th. Check to the 4th power! We had a killer run from June to late October. We went cautiously to smaller position sizing, wider stops and fewer positions this first 2 weeks of November. And, today, many of my clever brethren of traders and I got long and happy! Today was the day folks. Beginning to look a lot like (insert holiday you celebrate!)
S&P 500 (SPY) Subscribers: Positive Pivots in all
Russell 2000 (IWM) The high from October 29th is 111.62. Needless to say that is a place to see clear
Dow (DIA) “Retreated from the channel which can also be a good thing since if it clears, can do so now with more muscle.” Affirmative
Nasdaq (QQQ) Cleared 82.70 and now on new highs since 2000
XLF (Financials) 20.91 nearest point to clear and 20.66 has to hold
SMH (Semiconductors) You haven’t missed the boat here. Subscribers: 40.79 risk point to look at for tomorrow
XRT (Retail) Whoa!
IYT (Transportation) 127.61 the recent high
IBB (Biotechnology) Finally cleared the 50 DMA for an unconfirmed return to a bullish phase
IYR (Real Estate) Almost made back a whole week of losses in one shot. Still needs to do more though
XHB (Homebuilders) Confirmed phase change to bullish.
GLD Hard to believe how boring this has become
OIH (Oil Services) Not as exciting but not so bad either
XLE (Energy) 85.00 key to hold
TBT (Ultrashort Lehman 20+ Year Treasuries) If TLTs gap above 104.11, we could be talking island bottom
FCG (First Trust ISE Reserve Natural Gas) Unconfirmed phase change to bullish. Subscribers: Like this over 19.40
EWG (Germany) Huge range today. 29.42 has to clear
FXI (China) Subscribers: Could be a slingshot low. Has to clear 36.64 R1
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:
BSX Over 11.98 clears R1. The risk for a new swing is under 11.75
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)
BZH Like this one now over 19.76 for a swing risk 18.50
HCA Over 36.00 will clear R1. Like to see that happen very soon
CNX Unconfirmed phase change to bullish and now has to clear 36.35
Category 4: (Rip Tide) N/A
Phase Change:
GGP 20.20 point of risk. Like this for a swing since clearing the 80 monthly moving average. And still has to clear R1
IGT Improved in phase to a confirmed warning phase which means that after Friday’s brick wall pattern this is setup. Through R1 18.10 will consider an add
CYH Now, the next hurdle is the 200 DMA
USG 27.39 is the 10 DMA to clear next then can use today’s low for risk
PM Pretty for tomorrow with a reversal or breakout over 91.25
VRTX Confirmed slingshot with lots of room if good
MTW 19.58 the 200 DMA to clear with 19.24 a good tight risk
C If 49.11 holds, could see more upside especially since this cleared the 50 DMA for an unconfirmed phase change to bullish
THC Inside day right on the moving averages. has to clear 44.36 the 10 DMA and hold4 3.25
Shorts: A few I am watching like IBM WFM CELG EBAY-but none have clear setups to write about.
Bye For Now
