As we seasoned traders watched the substantial boost to our portfolios last week, an article in the newspaper got my attention. The headline: U.S. Life Expectancy Ranks 26 in the World. One reason cited for this statistic is that *“Americans go to the doctor on average four times a year while the International average is six times a year.In other words, we’re great at checking for problems, but less great at following through with treatment.” This got me thinking about volume and the stock market. Last Thursday and Friday everyone heard/read/saw that the market broke 16,000. The volume, however on both days, was considerably less than the daily average (currently 7 million plus shares a day). The greatestvolume in the Dow last week happened November 20th when it dropped considerably from its previous high-reminder-the day of the Federal Reserve minutes. Volume posted 10.2 million shares traded that day. Stretching the analogy some, the volume showed up when the “health” of the patient (stock market) came into question. Once the patient was “cured”, the volume dried up-or less great at following up with “treatment” if you will. What does this mean going forward? With the market running to new highs, the investors were no longer checking in. This week, the participants will find the excuse of remaining sidelined with the upcoming Thanksgiving holiday. Perhaps the validity of that will be waiting for the initial results of“Black Friday” and retail sales. Going out on a limb, sales should be robust. Keeping in line with historical peaks and valleys, it certainly makes the case for the euphoria to come back in after the Thanksgiving break with one more push on huge or double the average volume, which I suspect if does indeed happen, might be the high tick for the remainder of the year. Of course, this is just an educated guess partially based on the psychology of many “uneducated and amateurish” investors.
*“We don’t find our doctor visits especially helpful..we’re less likely to think our doctors spent enough time with us or gave an easy-to-understand explanations.” So many people remain baffled or incredulous as to the recent strength. They do not believe in “the treatment” until they see it as a miracle cure for everything! My hope is that a humongous rush to get some medicine doesn’t put us all in the ER.
*Sarah Kliff The Washington Post.
S&P 500 (SPY) A rising fast moving average now, 179 becomes pivotal. The price pushed and ended above the weekly Bollinger Bands. Subscribers: Positive Pivots in all.
Russell 2000 (IWM) 113 now likely with 111 area support near term
Dow (DIA) The rising fast moving average here is 158.90. Also cleared the weekly Bollinger Band
Nasdaq (QQQ) 84.11 the actual 2013 high tick from November 18th. Friday high 84.02. 83.25 support to hold
XLF (Financials) It seems the trend is intact for the rest of the year and into 2014-dips should be considered buy opportunities
SMH (Semiconductors) Inside day and compelling to watch since the range is between the fast and the 50 DMA. One way or another this breaks-telling
XRT (Retail) Inside day here too. Keeping with the analogy above, expect could stay in consolidation mode until after Thanksgiving
IYT (Transportation) 127.70 support and 129.63 the 2013 highs
IBB (Biotechnology) “New 2013 highs good for $25-30 over time.” Written last Thursday. On Friday it moved up 7.00 into that projected forecast!
IYR (Real Estate) Over 64.00 much better but still a major concern.
XHB (Homebuilders) 31.00 new area of support to hold
GLD Would rather short closer to the 122 resistance area but if breaks the monthly moving averages, 2013 lows are around the corner
USO (US Oil Fund) Looking for this to fill the gap to 34.60-then reevaluate
OIH (Oil Services) In its own world-not cooperating with the other groups-where to go for a short if market corrects again
XLE (Energy) “Promising to take out 2013 highs”. From last Thursday and it dutifully did on Friday.
XOP (Oil and Gas Exploration) Friday’s lows good support now
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs confirmed slingshot low. Subscribers: An ORR if holds 103.55 good
FXI (China) Like how last week ended with the gap over the 200 weekly moving average
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:
BIDU Correction to the 10 DMA. Has to hold Friday low and clear Friday high to see a move to 165-more day to miniswing
Category 2: (Pipeline)N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can eitherbuy 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)
TRIP Such tight compression sitting on the 10 DMA-have to keep watching to see which way it wants to go
BBBY Not a huge fan of the store, but the stock looks good if Friday low holds and can move over 77.67
BSX 11.85 good risk with over 12.10 better chance to see recent highs and beyond.
TEX Back above the 50 DMA-like on an opening range reversal now with support at 34.90
ATI If holds S1 33.48 and clears 34.17 R1, like the clearance on the 23 monthly moving average and weekly charts which appear to be basing.
AFL Inside day and Friday low good risk. Over 66.80 looks good to 2008 highs around 68.00 and perhaps beyond
Category 4: (Rip Tide) N/A:
Phase Change:
USG Big eyes here Monday for a move over Friday high and R1 with risk to 26.67
CENX If 8.60 holds could have an interesting buy/hold potential trade. Lots of overhead resistance, but di clear the 23 monthly moving average
TOL 33.30 place to hold and over 34.40 should continue higher
K 62.15 area now support with a move over 62. 56 reason to think it could get back over the 200 DMA and beyond.
PCAR If 56.45 holds, cleared to 50 dma and has to confirm the phase change back to bullish for more upside
HFC Cleared the 200 DMA and now needs to confirm and clear 47.14
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
SPG Has support at lower levels, but the action Friday suggests that this could not only test that but work its way down to 128.00
EBAY 2 inside days. Friday’s high good risk and could see move to 48.00 next
FTI If cannot clear 49.80 see this as a possible drop to 44.00 area
CLR Under 111.86 would be a good place for this start on Monday. Then more interested in the short for move down to105.76 and maybe lower
Category 6: White Cap-N/A
Bye For Now
