While the session began relatively lackluster, the volume registered impressively as even halfway through the day, SPY’s volume exceeded the daily average.That furthered the case for lower prices or at least yet another substantial distribution day, as our signs for a bottom require good volume and a green close, not dismally red.
Admittedly, my coined phrase of “200 as the new 100” began as a cynical, tongue-in-cheek poke at the new age expression of “anything is the new anything,” an expression to highlight the current market volatility. At this point, the cynicism feels almost misogynistic. Enough already!
Phases continue to deteriorate as the S&P 500 tickled the 200 DMA then posted a new multi month low, failing another 1.5% from there while at least, holding the 2014 lows. One can guarantee that the bulls closely watch that line of demarcation (the 200 DMA), which would include any institutional buyers sidelined for now until or if the 200 DMA clears.
Therefore, we will stay out of the market’s way. Monday’s paltry rally early during the day may have been another chance to get short for some. For us, these oversold conditions provide an opportunity to scout the instruments for those that have already cycled through to bearish phases long before the indices began their descent and are now ready to cycle their way back to recovery. In other words, like 2010-2011 a clever stock pickers market.
S&P 500 (SPY) Today’s volume exceeded last Thursday and Friday’s. This is a meltdown into now support levels from May Subscribers: Negative Pivots
Russell 2000 (IWM) October 9th 2013 the low was 103.00
Dow (DIA) If this can get a move back over 163.13, we are back over August lows-otherwise, do not try to catch a falling knife
Nasdaq (QQQ) 91.83 the 200 DMA and now 93.89 resistance
XLF (Financials) 22.33 the 200 DMA
KRE (Regional Banks) Already beat up, this one is still on my radar
SMH (Semiconductors) 44.25 a good place for this to stop dropping
IYR (Real Estate) Holding up over the 200 DMA which is a good example of instruments that already got hammered possibly cycling to improvement
GLD 117.80 now support with120-120.50 a good target
USO (US Oil Fund) 2 doji days in a row which could mean running out of steam on the downside. That would at least mean a move over 32.50
TAN (Guggenheim Solar Energy) Subscribers: I wrote about 33.15 a place to buy. However, we need to wait for some evidence of a support level holding up before we just go bravely long
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs not even close to the 2012 highs
CORN (Corn) Subscribers: Big day up and nearing the 50 DMA
BAL (Cotton) Subscribers: Unconfirmed recovery phase-worth watching
JO (Coffee) Subscribers: Consolidating near highs
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:N/A
Focus List: ULTA ASML
ETR If today’s holds, this now has to clear79.66 to see 81.00
MYGN Neutral pivots close to the 50 DMA. If clears 39.00 could see move to 42.50
Category 4: N/A
Phase Change:
VNO Inside day wedged between the 50 and 200 DMAs-101.10 sup and 103.80 resistance
KSS Classic pattern close to the 200 DMA and good stop if mkt settles down. See a move back up to 59 as likely
WFM Reports November 5th. Inverted hammer doji which tells me that if the mkt settles down, this could have a good rally with bottoming action
DDD Here is an outperformer near lows beat up and could be ready to see a move to 46 if 38.80 holds
YOKU Outperformed and if holds 16.00 and clears 16.86 could see a bounce to 18 or higher
Shorts: Focus List: HLF GNC DTV
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BBBY Unconfirmed phase change to Bearish. If cannot clear 64.60 has room to 63.00 or lower
RHT Distribution phase unconfirmed-prefer an ORR against the 200 DMA but if market stays weak, cold see 53.00 next
NSC Crazy action but now, if cannot clear107.15 still can see 99.40 the 200 DMA
MCK confirmed phase change to warning. Again, prefer an ORR but has lots of room to downside if risk is fine on weakness to around 187
INFA Never broke the OR low which means if does tomorrow, can see a move to 31.00 or lower
Category 6:N/A
Best Best wishes for your trading,
Michele Schneider
