Monday the market closed up but it felt as though disaster loomed. Tuesday, the market closed lower yet it feels more solid. The psychology suggests that when we brace for the worst, the not-so-bad seems great! We humans are such a hopeful species. The small caps do look destined to test the underlying moving average as they now have a 2-day correction from the almost match of the 2013 highs. Plus, the reversal occurring on a Monday, set the theme for at least the first part of the week in motion. The Dow, had an inside day to Monday’s range (Tuesday’s range inside the range of Monday), which probably makes Wednesday’s range break either way elucidating. The Real Estate Sector continues to struggle big time, while the Financial sector held firm. Finally, the fourth tell, interest rates, firmed today keeping the 20+ year Long bonds in its Bearish Phase. We go into hump day with a split decision. The next heavyweight contender is the intelligent stock picker.
S&P 500 (SPY) 178 the 10 DMA to defend with a move over Tuesday high encouraging. Subscribers: Negative Pivots in all.
Russell 2000 (IWM) Subscribers: TWM confirmed the slingshot, gave an opening range reversal buy and over closed marginally over the 10 DMA.
Nasdaq (QQQ) 82.70 was my number last week. Still watching that area to see if it can hold.
XLF (Financials) Inside day near the highs
SMH (Semiconductors) My poor semis are now on the 50 DMA with 40.00 a pivotal area
XRT (Retail) Retail Sales number due in the morning with still many retail chains reporting income. Topping candle confirmed unless it clears 87.20
IYT (Transportation) Amazingly similar chart to the retail ETF.
IBB (Biotechnology) The next dance for bulls could be here. Since Aug-3 higher lows on corrections-move over 2013 highs good for $25-30. Plus, holding the 50 DMA.
IYR (Real Estate) Under last week’s low will not be good.
XHB (Homebuilders) Still digesting recent move
GLD Inside day. 121.85 support or this will head further south
USO (US Oil Fund) 34.00 if crosses should give this some pop
OIH (Oil Services) Reversal candle from the highs in play
XLE (Energy) Like Biotech and Financials, trying to hold and lead
XOP (Oil and Gas Exploration) Confirmed warning phase.
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs under 104.11 in trouble.
IFN (India Fund) Subscribers: Worth a look now that it held the 200 DMA
EWG (Germany) Digesting
FXI (China) Inside day after the big gap up
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:
JWN If holds today’s low, then could still perform over 62.25 the pivots
DRI If today’s low holds, like the lineup of today’s high and R1
BBBY Like for more day to miniswing trade if holds today’s low and clears 77.77
AXP Inside day. A bit far from risk but if use 82.16 then for a miniswing trade, could see test if not clearing of 2013 highs.
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:
VMC Inside day. Like to see this clear today’s high and R1 and hold today’s low
Category 3: (Double Up) N/A
Phase Change:
VRTX Inside day on the 10 DMA and if holds todays low and clears R1 could resume move after slingshot
NTRS 56.00 now support. If clears 57.38 clears the 10 DMA. Also over the 80 monthly
CVX First target is 123.70 and needs to hold 120.55 area.
MAS If clears 21.50 with about 1.5 ATR risk to 20.75, then has a shot for the 2013 highs and beyond
BSX Unconfirmed phase change to bullish. Has to hold 11.84 the 50 DMA
TOL If holds 32.76 then hovering on the 200 DMA with a move over 33.68 clearing R1
CCL If holds 35.01 look for a new entry against the level. Has to also clear the 10 DMA at 35.92
TSLA Almost a slingshot low. Look for a hold and move over 126 with possible rally to 137.00 area.
KSS 3 inside days now and one to follow long or short depending upon which way today’s range breaks
Shorts: Other than our AAPL short, the others are a bit overdone. Watching FAST EBAY.
Bye For Now
