Those 4 scenarios we have been watching distanced further from realization on Tuesday. The Russell 2000s held the necessary support but retreated from the overhead fast moving average. The Real Estate and Homebuilders groups fell in price. The Financials also weakened some. And, the TLTs or 20+ year Treasury Bonds, dropped substantially, even deteriorating in phase to unconfirmed bearish. Retail held up, making yet a new high, a good sign. But is that enough? Stepping back, no real damage was done to any of the 4 indices and the phase remains bullish. Volume was fairly light. Since who doesn’t like a theory-and even if you don’t, I assume you’re still reading because of curiosity- here goes one. What if the significance of the Federal Reserve’s next move is waning and the market is digesting the possibility that Quantitative Easing now has diminishing returns and tapering will not look like the boogey man? If that is the case, the drop in most groups should abate, the indices should continue to firm, some groups will fall more due to cyclical factors while others will rise. In other words, great opportunities for longs and shorts if you know where/how to look.
S&P 500 (SPY) Over 176.85 will look better and 175.22 support to hold Subscribers: Negative Pivots in all except QQQ-neutral
Russell 2000 (IWM) Inside day and now needs to clear 110.18 and hold 108.00
Dow (DIA) 154.80 support and 156.40 a good point to clear
Nasdaq (QQQ) Like to see 82.50 hold now in what looks like sideways consolidation.
XLF (Financials) 20.39 support and has to clear 20.65
SMH (Semiconductors) Back over 41.00 will be hard to argue with
XRT (Retail) New highs
IYT (Transportation) Digestion
IBB (Biotechnology) Held the 50 DMA
IYR (Real Estate) Subscribers: Like this over 67.00
XHB (Homebuilders) Inside day. 30.00 now the support area to hold.
GLD Seems this has more fallen out of favor to trade rather than just looking bearish
USO (US Oil Fund) More oversold-best I can say for it
OIH (Oil Services) 49.75 next place to clear
XLE (Energy) 87.62 highs to clear
XOP (Oil and Gas Exploration) Inside day
TBT (Ultrashort Lehman 20+ Year Treasuries) About to push over the 50 day moving average
UUP (Dollar Bull) Unconfirmed phase change back to Recovery
IFN (India Fund) 21.16 is a good high to clear
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: 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:
HD Reports November 19th. 75.60 the 50 DMA good risk and a move over 76.94 and today’s high compelling for a miniswing
OMX Reported today. 14.87 good risk and one if setups over 15.51 would consider keeping for a swing trade.
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)
OPEN Big move post market-an open around or over 74.00 will break a trendline form the 2013 highs. Risk then would be around 72.00
FITB We almost got in last week. Now, after a big day, like to see around 19.00 hold to look for an entry
PSX S1 and today’s low line up for risk. Ditto for R1 and today’s high for entry
USG Did well on a sloppy day. Now, over 28.45 should continue to do so with closest risk 27.75
CCI Small miniswing position and improved in condition. Like more over 76.28 and should hold around 75.35
AMZN Inside day and small range. Unique opportunity to have a tight risk to 354.40 yesterday’s low
ZMH Never got the Opening Range Reversal against the 10 DMA. Was a hard day to buy strength.
P Reports November 18th. Over 28.26 will take this to new highs for a more miniswing trade to around 30.00
Category 4: (Rip Tide) N/A
Phase Change:
PM Cleared the 200 DMA for a confirmed accumulation phase. Good risk to under today’s low and S1
IGT After an inside day, wouldn’t lose track of this, especially if clears today’s high and the 50 DMA
CCUR Been tracking this stock. Like it over 7.47 for a swing
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IBM If cannot clear 179.20 then still can see 173.50 or lower
TEL Under today’s low will confirm a phase change to warning with risk the 50 DMA 51.92
Category 6: White Cap-N/A
Bye For Now
