If there is a calmness in life lived in gratitude, then it stands to reason that there is gratitude in a market that finally lived in calmness, at least for the day.
With many companies reporting this week plus the FED’s final meeting for 2014 coming up Tuesday and Wednesday, not surprising that the week began absorbing the wide ranges of prior weeks , thus reducing volatility.
The volatility index (VXX) continues to hold 32.50, a now fairly substantial support level that if breaks, could bring in end of month buying in the indices. Conversely, VXX over 35.35, we should see that sentiment quickly shift bringing back sellers, and exacerbating the nerves of an already nervous long crowd.
Encouraging that Regional Banks, Semiconductors, Real Estate,Transportation, Biotechnology and Retail all firmed. Moreover, the Financial Sector confirmed the Bullish phase.
NASDAQ (confirmed the Bullish Phase defending the 50 DMA) and the Dow closed slightly green. The Russell 2000 held 110, a now multi month pivotal point. The S&P 500 had an inside day (the trading range within the range of Friday) right beneath the 50 DMA. A gap above the 50 DMA and given the other positives, it will be for yours truly, a rare time this year that my confidence in the market as a whole will advance from tricks to treats.
Til then, we go back to where we began; “One cool judgment is worth a thousand hasty counsels. The thing to do is to supply light and not heat.” (Woodrow T. Wilson)
S&P 500 (SPY) The overhead resistance 196.81 (sloping up) at the 50 DMA is reachable. 194.50 the place to defend Subscribers: Positive Pivots in QQQ DIA Neutral in SPY Negative in IWM
Russell 2000 (IWM) 110 Pivotal, 108.80 support then 107 and overhead resistance at 112.15 (declining slope) the 50 DMA
Dow (DIA) The 50 DMA is 168.77 resistance with 166 the number to defend for sure
Nasdaq (QQQ) Confirmed phase change to bullish-98.02 place to defend
XLF (Financials) Confirmed phase change to bullish-23.10 to defend
KRE (Regional Banks) Good performance bullish engulfing pattern-eyes here over 38.00
SMH (Semiconductors) 46.96 the 200 DMA and overhead at 50.18
IYT (Transportation) Strong as expected
IBB (Biotechnology) Another new high
XRT (Retail) Looks like its consolidating over the 200 DMA 84.71 with 86.72 the 50 DMA to clear
IYR (Real Estate) Not quite new highs but getting closer
ITB (US Home Construction) Inside day and looking good over 24.26
USO (US Oil Fund) Now that everyone is so bearish, it seems that the new low and bounce could be bring more bounce
TAN (Guggenheim Solar Energy) Subscribers: Might consider an add over today’s highs
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 120 pivotal unless this begins to break further below 118.70
UUP (Dollar Bull) A close this week over 22.76 is 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: (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:
ULTA Classic condition 1 stock in correction with risk to 115.75 the 10 DMA and over pivots 117.40 can look at ½ positon over 118.83 R1 the other ½ to see if this can get to 124 in a good shopping season
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)
HUM If holds S1 132.12, over 133.40 is sort of a close your eyes scenario and do a miniswing trade
AAPL Neutral Pivots and holding now for last 2 days over 104.70 good risk for a miniswing trade
JWN low volume breakout with 71.00 now good support for a miniswing trade
Category 4: N/A
Phase Change:
PAA Reports Nov 5th. Consolidating on the 200 DMA and if holds today’s lows and clears 57 can see upside for mini
WFM Unconfirmed phase change to recovery. Needs to defend 38.20 now for a mini
OC 30.33 is the 10 DMA to defend with 32.00 the area to clear for back in the game
INTC Inside day and under the 50 DMA sort of mimicking the SMH. Risk 32.12 swing good
KSS 57.50 risk with a move over 59.10 clearing a lot- R1 and a trendline for a miniswing
RCL Inside day and has to clear 64.02 and hold today’s lows for phase change
LULU If holds todays lows (max risk) then like over 4211 for a mini to swing
JCP Held the 10 DMA and now, has to get back over 7.75
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
DTV Inside day and remains under resistance at 84.75 and R1 if fails 83.79 still can see the 200 DMA or lower
NFLX Teeny short which can be an add if cannot clear 380
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
