The most fun I had today was shopping on Amazon Prime for facial cleansers. (Incidentally, AMZN stock dropped 2.3% while approaching daily support at around $314-315)
First off, I had the time to research the best rated cleansers, a luxury for me since my eyes are typically on the next great trade and not internet shopping! Secondly, I wanted to avoid trading as much as possible since onecannot be long in this market nor short after Wednesday’s daunting short-covering action.
Third, I could FEEL the skin on my face wrinkling from a combination of over contorting, frowning, laughing (more grimacing really), and at times, nearly weeping (not really, but some might have wept today).
Clearly, we should not expect that we went from the 200 point swings as the new 100 point swing to now 300 point swings as the new 200 point swing. Try saying that ten times fast!
What can we expect for the last day of the week? I’m hoping not too much, but that’s just my face talking in its attempt to avoid more stress wrinkles. I mean how many more of these complete reversal days can we have in a row? One would think active traders are thoroughly exhausted by now!
All indices closed above Wednesday’s lows. There is some merit to that albeit minimized by the extended trading ranges each day this week. After all, to take out a previous day low when the range is nearly 300 points becomes mathematically less probable.
There is a classic chart pattern and a rare one at that called “railroad tracks.” That pattern describes the action in the indices the last two days. Railroad tracks point to distribution, i.e., professional selling. Because they often occur near a top, the pattern is a sell signal.
With that in mind, the 200 DMA beckons a soft or hard landing in SPY QQQs and DIAs as the next point to watch. Til then, will be watching for some other signs such as a blow off move or real institutional buying with a two-day confirmation of a better phase in most likely, NASDAQ.
S&P 500 (SPY) 192.35 last week’s low still there as some minor support until the 200 DMA below Subscribers: Negative Pivots
Russell 2000 (IWM) Railroad tracks and inside day-new 2014 lows this week-makes you wonder what would have to happen to bring the life back?
Dow (DIA) 165.67 the 200 DMA with (not that I want to scare you), October 19th 1987 in my mind.
Nasdaq (QQQ) 95.97 last weeks low back in sight. Inside day-a miracle would be a move over 99.00
XLF (Financials) 22.33 the 200 DMA
SMH (Semiconductors) 47.94 the August low.
IBB (Biotechnology) Marginally held the 50 DMA making this STILL the best place to go if market firms
XRT (Retail) 83.04 August low
IYR (Real Estate) Held 70.00 which continues to make that the key area
GLD Closed green-I would watch here carefully. Of course, nothing holds up when everything crashes, but I can see a case for a rally with lots of fear around
USO (US Oil Fund) New 2014 lows
FCG (First Trust ISE Reserve NatGas) 15.20 the 2012 low and 15.22 the 2013 low
TAN (Guggenheim Solar Energy) Subscribers: Back to looking for 33 as a buy order
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs having issues around 119.50-has to clear or who knows-the bond bubble?
UUP (Dollar Bull) 22.65 is the low of the most recent runaway gap-holding
EEM (Emerging Markets) Boost here over the 200 DMA
SGG (Sugar) Subscribers: Over 44 looks really good
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:N/A
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)
PANW 100 good support with a move over 104.67 not bad for a day to mini
BMRN 71.40 key support and could still try to go up if market doesn’t collapse further-day to mini
AAPL Now I remember that 103 has to clear to get this going again-100 has to hold
Category 4: N/A
Phase Change:
VNO Unconfirmed phase change to warning if holds over 100.95
LNKD Inside day and over S1 so now needs to clear R1 205.80
TSLA 252 main support with positive pivots-265.50 has to clear though
NFLX over 467 should continue up if holds 458.00 the 50 DMA
JBLU Positive pivots and if holds todays lows could move over 10.95
SWI If holds 41.90 like over R1 42.50 for a minswing since has overhead resistance
Shorts: DHR V NSC SBUX SWKS
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CTRX Been over the 80 monthly since forever and today looks like its breaking the 200 weekly moving average. All about risk but if good, a long term short
IBM Been bearish all year really but now, the market is cooperating to make a case that if it cannot clear 187.65 the 200 DMA, 182 next support
WYNN All about risk but this is now breaking a wedge that could drop this to 169-170
Category 6:N/A
Best Best wishes for your trading,
Michele Schneider
