As the market tries a Republican Senate and Congress with a Democratic President on for size, some preliminary signs to reflect upon.
Oil-Regardless of the near-term future of oil and gas, I wrote extensively from the tech bubble about the huge volume possibly pointing to a blow off bottom.USO closed up over 2%. Of course now, we look to see if it has follow through.
Financials-As the indices and other sectors corrected, this held tough and continues to do so.
Solars-As much as the price of production has come down, there was no love in this group at all.
Healthcare-market anticipates no love here either for the time being.
As far as the indices, NASDAQ closed weak relative to the others but held the runaway gap (100.56 is the top and it has to hold at least a couple of cents above it to be a “gap”). S&P 500 made new highs, even closed on new highs yet did little to ignite after the 3 shooting stars pattern. Perhaps a sleeper.
The Dow, no surprise, is on new highs. And like going to a Doctor whose last name is Needle, the aptly named Small Caps held over 115.80. It needs a booster shot to clear 118.
Going into Thursday, I expect more upside-but within this extremely weird environment where it’s hard to find leadership, especially in the typical places-high momentum stocks.
Lack of leadership, bizarre action, some stocks down enough to evoke terror, other instruments living in the neutral zone, while others still, flip flop from day to day-sound familiar? Steadfast as Alice Through The Technical Looking Glass, make sure you know whose reflection you see looking back at you before you jump down the rabbit hole!
S&P 500 (SPY) I wouldn’t dismiss the shooting stars-they could just be taking their time to blast off Subscribers: Positive Pivots in all
Russell 2000 (IWM) Consolidation-not necessarily a bad thing
Dow (DIA) If you all learn nothing else from me, here’s one to take to the grave-trust island bottoms
Nasdaq (QQQ) Considering how weak many stocks in this index looked, this held up impressively
XLF (Financials) More upside indeed
KRE (Regional Banks) 40.43 to clear now
SMH (Semiconductors) 52.68 the 2014 high in its midst now that it closed over 52.00
IBB (Biotechnology) I have theories on why this sank-considering it rose recently on Ebola concerns-but, I will keep those thoughts to myself-tech bubble-did write this looked tired way before
XRT (Retail) 88.00 a swing level of support
IYR (Real Estate) Closed unchanged at new highs
ITB (US Home Construction) We can at least say this is holding the 200 DMA
GLD (Gold Trust) Here’s a rabbit hold for you
USO (US Oil Fund) Confirmed a reversal candle after huge volume patterns. Now, at least one close over 30.50 would be good to see
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 120 pivotal unless this begins to break further below 117.68
UUP (Dollar Bull) New highs again
IFN (India Fund Inc.) Looks like its got way more upside
EWW (Mexico) Subscribers: Like this one over R1 68.06 with risk to the 200 DMA or closer the 10 DMA at 67.40
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:
ABBV Had the runaway gap now corrected for 3 days. Like ½ over the 62.80 and the rest over R1 63.40 for a day to mini
Category 2:N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy an 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)
BRCM If holds 41.40 and clears 41.98 looks better for day to mini
AAPL Inside day. Day to miniswing at these levels although the risk to 106.50 the 10 DMA not bad for a swing
Category 4:N/A
Phase Change:
OC Unconfirmed phase change-now today’s low good risk if confirms tomorrow-swing
GLPI-a 2014 fave now has an unconfirmed phase change to recovery. If holds todays low, and confirms over todays high like for a swing
WFM 42.53 is the 200 week moving average. If this is basing now that it reported, it needs to close above that level. Meanwhile 42.90 is resistance from May swing high
GE one push will get this over the 200 DMA at 25.92 and risk will be the low of the day if does so for swing
EXPE Watching to see if this clears 84.26 which also clears the 50 DMA
MAS If fills gap to 22.55 and holds, still good for a swing using the 200 DMA for a risk
YOKU Reports 11/13. Look for an ORR now and a day to miniswing risk
HPQ Reports 11/25 Inside day-like this much better now over 36.40 risk 35.50 area
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BA Unconfirmed phase change to Bearish-should not clear todays highs 123.50 the 10 DMA needs to break
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
