Looks like a stay of execution granted by the Federal Reserve and their clarification of no tapering while the economy remains soft. Therefore, although the troublesome small caps Russell 2000, closed red for the end of the week, with yet another big distribution day in volume, the money floated into other areas. The Dowclimbed along with several individual names such as FedEx, in the transportation sector, US Steel, in theIron and Steel Group and some names related to China including the ETF for China-FXI. As a result,NASDAQ and S&P 500 held the fast moving averages, leaving the market in relatively good shape.NASDAQ closed marginally lower for the week, while the Dow and the S&P closed marginally higher. The huge volume in the small caps does not constitute a blow off sell off since the move down is not extended enough. For now, looking at this week, unless the market begins with a gap lower all around, see the small caps digesting above the 50 DMA and the other indices continuing their journey up.
S&P 500 (SPY) Last week’s low needs to hold to keep this in good shape. Subscribers: Pivots Negative in all but DIA
Russell 2000 (IWM) Getting close to support around 107.50 with an approaching oversold daily relative strength indicator. Over Friday’s high would be a relief
Dow (DIA) Over 156.27 a very good sign while again, last week’s low need to hold
Nasdaq (QQQ) Friday’s high is a great place to clear while Friday’s low, also the low of the week, needs to hold.
XLF (Financials) Hung on thanks to JP Morgan. Now, has to clear 20.80 to look better
SMH (Semiconductors) 41.44 is the recent high to keep this going. 40.73 is where you want to see this hold
XRT (Retail) 83.55 last week’s low to hold while this remains a great candidate to lead.
IYT (Transportation) Looking a lot better
IBB (Biotechnology) 4th time this year, this is will show if it can hold or if will break the 50 DMA
IYR (Real Estate) Inside day
XHB (Homebuilders) 29.85 is the ultimate support if this is to work its way back up the channel
GLD Back in a bear phase
TBT (Ultrashort Lehman 20+ Year Treasuries) Heading to the 50 DMA resistance
UUP (Dollar Bull) Unconfirmed phase change to recovery
EWG (Germany) If this does not fill the gap to 29.30, could be a scary looking island top.
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
**NOTE: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.
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:
TEX Inside day.We are in this now with a wide stop. But, will consider trading around the core position if this takes out R1 35.14 and Friday’s high. Now, our swing stop should suffice given position sizing
MAS Went home with a swing position with a good risk to under the 200 DMA. Now, has to clear R1 21.35 to either add or trade around the core position
USG Like this one for many reasons-golden cross, cleared the 10 DMA, closed green and yet still needs to clear R1 at 27.93 and hold Friday’s low
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)
ATI Inside day. Want to see Friday’s low hold and clear 33.67
HCA Ended with a doji day and over the 10 DMA. Has to hold Friday’s low and clear 47.70
BBY Reports November 19th Max risk 41.60 and over 43.50 or so should take this to new highs with 2010 resistance at 48.83
NFLX Small range which gives us an advantage to look for a buy against Friday’s low with positive pivots. S1 is 325.64-bottom line risk
P Reports November 18th. 2 inside days. And has to hold 25.00 and clear 26.80 to clear the 10 DMA
RCL Inside day. 41.40 is the low that really counts, but like to see it clear R1 after the inside day regardless
IR 2 Inside days-max risk in this environment is 66.70. Over 68.30 Wednesday high could see a new leg up
Category 4: (Rip Tide) N/A
Phase Change:
JPM Unconfirmed phase change to bullish. Friday’s low max risk. Would consider a reversal or breakout after some good volume
PLD Over the 80 monthly and the 10 DMA. Has to hold 39.25 the 200 DMA and recent highs are 40.99 to clear to keep this going
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
COH Short a small position but still looking weak especially if takes out 50.00
DOW Like risk to 39.41 with lots of room to downside and first support around 38.00
Category 6: White Cap-N/A
Bye For Now
