Lately, I (and quite certainly many, many more of you as well) spend at least six hours a day staring at 8 different computer monitors with such intensity that by the time I drag myself to the gym, either cook or go out for dinner (toss up these days-cooking I love and find relaxing; getting to the supermarket-that’s another story), then sit down on the couch for a TV show or movie, I’m asleep in about 20 minutes.
Of course fatigue plays a part; however, the real culprit for why TV is my best sedative-very little of what the media has to offer comes close to the titillating entertainment factor of the market.
In Wednesday night’s daily I wrote about volume patterns, the small caps, Biotech and their potential significance. I have waited 3 years (since August 2011) to see this type of volume and volatility!
After IWM had more than double the average daily volume, SPY had 3 times the average daily volume on a down day, the long 30-year Bonds or TLTshad over FOUR times the average daily volume, I began Thursday’s session looking for confirmation of a blow off.
I surmised that after the strong reversal patterns in so many other instruments as well, a green inside day would be good for starters. Interestingly enough,SPY DIA and IWM took out Wednesday’s highs so no inside day. IWM closed green while DIA, QQQs and SPY closed red. The QQQs did indeed post an inside day, yet under the 200 DMA (I also wrote that a close over the 200 DMA would be even better).
As we head into Friday, like a delicious miniseries, we await the plot outcome of what the protagonist (IWM) in the market has in store for us. Will the small caps continue to lead the charge for more upside, say to 110? Or, will theantagonist reign (QQQs), rolling over under the 200 DMA hence taking the rest of market to lower lows?
Stay tuned my friends to the next segment of War of the Global Economy (With a Little Ebola Thrown In!)
S&P 500 (SPY) Volume decent with nearly the scenario we expected-practically an inside day. Tomorrow should be decisive as to more upside-taking this back to the 200 DA or, a break of Thursday low, next stop175 area Subscribers:Positive Pivots in all except QQQs
Russell 2000 (IWM) The winner and current champion, took out the 10 DMA with good volume-also, confirms the reversal candle form the lows. 110 major resistance but first, 108.80
Dow (DIA) So far from the DIA but 3 possible scenarios-1. Gaps up leaving an island bottom 2. Breaks Thursday’s lows and heads south 3. Rallies without leaving an island, but lives for another day leaving bulls hopeful over the weekend
Nasdaq (QQQ) Inside day under the 200 DMA-really clear to watch-either over the 200 or under Thursdays low-follow
XLF (Financials) Here is the classic inside day pattern after big volume closing near the intraday high
KRE (Regional Banks) big reversal off new recent lows and bullish engulfing pattern
SMH (Semiconductors) Got the green day, not an inside day and could not clear the 200 DMA-that is key
IYT (Transportation) All about this holding the 200 DMA
IBB (Biotechnology) 260 pivotal-stays above and consolidates good chance to see the 50 DMA. Breaks, good chance so will the 200 DMA
XRT (Retail) Inside day but red close-has to clear 83.00 or could be more trouble
IYR (Real Estate) Looks like it’s coiling to take out the 50 DMA but has to really hold the 200 DMA as well
GLD Inside day-paused as if waiting like us to see what the market does next
Metals and Mining (XME) Confirmed the reversal pattern
USO (US Oil Fund) 31.00 pivotal as this might have finally stopped going down
OIH (Oil Services) Another reversal pattern confirmed
XLE (Energy) Confirmed the reversal pattern
XOP (Oil and Gas Exploration) Nice run to the resistance at 61.00
FCG (First Trust ISE Reserve NatGas) Over 15.20 gets back over those multi year lows til the one put in this week
TAN (Guggenheim Solar Energy) Subscribers: Small swing probe wide stop to see if this can hold the 23 monthly moving average and test the high of the channel I show on the video
TBT (Ultrashort Lehman 20+ Year Treasuries) Classic blow off volume move in TLTs. Let’s call 120 pivotal
FXI (China Large Cap Fund) 38.40 pivotal if this is good on the 200 DMA support
CORN (Corn) Subscribers: Inside day back over the 50 DMA-interesting
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: (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)
MYGN Inside day on the 10 DMA and slightly negative pivots-has to hold 37.25 and clear today’s highs
PM Huge move after earnings report. Can look for an ORR against 84.50 or since basing, over 86.00 just jump in
Category 4:N/A
Phase Change:
RAX Inside day and converging moving averages-if holds today’s lows and clear 35.00 like for move to fill gap to 36.50
HPQ Huge move big range-like an ORR against 32.95
CPHD Reported. Like if holds S1 and with the 200 DMA close, could buy in anticipation of that clearing if risk is good for a swing
HSP Nice move off the 200 DMA and like an ORR against the 200 DMA best
GLPI Reports 10/28. Moved up a lot last 3 days, so now, an ORR is preferred
YOKU Confirmed slingshot low. Has to hold 17.00 and move over 18.00
ONVO has to clear 6.38 now and hold 6.00
WFM Reports November 5th. Has to clear R1 37.23
SFM Inside day. If holds today’s low and clears 29.50 looks good to 30.07 the 50 DMA
Shorts: ABBV KSU UPS
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
FDX Inside day under the 50 DMA confirming the warning phase. Like this under 148.81 for a drop to the 200 DMA and if market rolls over, lower still
INTU Inside day under the 200 DMA confirming the distribution phase. Under 78.00 can see 71.50 if market is weak
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
