Hump day and well, no comment on how the Federal Reserve and the release of the FOMC minutes fit into that euphemism.
The Dow retreated back to the fast DMA and the channel it broke out from (close enough anyway). The Russell 2000s weakened but remain above the 50 DMA, although also note that the last 3 trading sessions have all been distribution days in volume (when the volume exceeds the volume from the day prior and the price drops-strong warning). NASDAQ closed right on a pivotal area but stepping back, as long as the runaway gap holds, corrections will look like buy opportunities. Finally, the S&P 500 tested and held the fast moving average. Biotechnology held up well while the Semiconductors confirmed a warning phase. Even booze and cigarettes struggled (Jim Beam-BEAM Philip Morris-PM). Seems today the world turned to drugs (Vertex Pharmaceuticals) and coffee (GMCR up 3.6% post market at time of writing.)
S&P 500 (SPY) 178 the 10 DMA to defend. Subscribers: Negative Pivots in all.
Russell 2000 (IWM) Watching the 50 DMA and today’s high to feel good again
Dow (DIA) 157.80 good support to hold
Nasdaq (QQQ) 82.70 was my number last week. Closed right there-above or below it will give a good clue as next direction
XLF (Financials) Held on all day until the you-know-who-FED!
SMH (Semiconductors) 40.00 or bust
XRT (Retail) 86.45 the support at the 10 DMA
IYT (Transportation) Landed on the 10 DMA
IBB (Biotechnology) A move over 2013 highs good for $25-30. Still has to hold the 50 DMA
IYR (Real Estate) Looks heavy-not great sign for things to come if this sector cannot hold
XHB (Homebuilders) Still digesting recent move
GLD Inside day. That monthly moving average will not hold next time. Now, 121.85 area is resistance
TBT (Ultrashort Lehman 20+ Year Treasuries) Mentioned that TLTs under 104.11 spelled trouble. TBTs blasted off.
FCG (First Trust ISE Reserve NatGas) Confirmed the bull phase.
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:
AMZN 358.43 the 10 DMA to hold and has to clear 366.50. Best way to look at this is if the market firms-this is a stock that should do well.
TRIP 2 Inside days. Needs to hold today’s low and take out today’s high.
AFL If today’s low holds, then look at this over today’s high and R1.
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 Still ok if holds 55.10 and clears 56.05
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)
FWLT Inside day. Did well. Now if todays low holds, like over 29.55 the 10 DMA
HIG Inside day and has to hold today’s low since that is also on the 10 dma. Over 35.15 clears R1
MCHP Neutral pivots. Over the 10 DMA will make this look even better if holds around today’s low
DRI 52.50 level should hold now. And, held up well considering. We are long and will update stop after the open
TXT If today’s low holds, still like this one especially if opens unchanged or better
Category 4: (Rip Tide) N/A
Phase Change:
NTRS I almost bought this today but decided to wait. Now, to trade it tighter, if S1 or 57.07 holds, will look at it fresh
TOL Flirting with the 200 DMA so like it if holds today’s low and clears around 33.50
Shorts: Watching COH-but many are beat up now
Bye For Now
