Is there any hope still alive as we saw all the holdouts except Biotechnology on the 50 DMA finally give it up-and in a big way?
I for one, who dreads buying strength, doesn’t exactly buy weakness, and prefers to buy when an instrument consolidateswith the least amount of risk near a major moving average, is sort of glad for this action.
Now, we get to see what has real relative value versus the fluff we have seen in the last 1 year and 9 months with too many people looking like geniuses in a historical bull market. Do I sound cynical?
With that, SPY confirms the warning phase, QQQs and DIA enter anunconfirmed warning phase and IWM is now officially oversold on 2 different RSI timeframes. May 15th low there 107.44, Wednesday’s session low 107.43. How’s that for symmetry?
What to do from here? Bias definitely looks as though the cycle of the phases needs to deteriorate even more over time before we can pull out of this disintegration. However, even with the caveat emptor, we can go up before we go back down. And there are always the superior stock pickers, finding the counter movers.
S&P 500 (SPY) 190.55 is the August low with 197 now massive resistance and a place to consider selling into Subscribers: Negative Pivots in all
Russell 2000 (IWM) Tested May lows-first to turn up? Wouldn’t surprise me
Dow (DIA) 169.00 resistance and August low under the 200 DMA-that’s not good.
Nasdaq (QQQ) 98.00 now massive resistance with 94.00 the August low
SMH (Semiconductors) My beautiful semis broke the 50 DMA and 50.00. 47.94 is the August lows
IBB (Biotechnology) 265.75 is the 50 DMA as this now remains the shining star of who’s who over the 50
XRT (Retail) 83.04 August low as this entered an unconfirmed distribution phase
IYR (Real Estate) Major outperformer but has not given a buy-until it clears the 200 DMA
USO (US Oil Fund) Under 34.00 not good
TAN (Guggenheim Solar Energy) Subscribers: If by the end of this week this has defended 37.00-38.00 I am still very interested to buy
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs will negate the island top if fills gap to 118.67
SGG (Sugar) Subscribers: Dropped to the lows of a monthly channel going back to 2011
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
***NOTE: Our model portfolio to date is up 7% with SPY up 5.24%-officially outperforming. Remember, active swing trading is one aspect of our overall asset management. It’s supposed to be the place to go for low volatility and high, consistent outperformance. Now, as cash is our main position, we are free to find the best opportunities without the feeling we have to make up for larger losses. Of course in hindsight, we could be shorter-but today is the first time DIA and QQQs broke their 50 DMAs in a while.
Category 2:N/A
Category 3: N/A
Category 4: N/A
Phase Change:
D Inside day. 68.91 max risk like over 70.16
SWI-I’m not crazy-like this if holds against the 200 DMA at 41.12 but at least it clear R1 at 41.98-here because I like the weekly chart
LEN Why is this here? Held the 50 DMA the gap from August 19th and the weekly and monthly moving averages. Max risk 38.11 and R1 38.96
BXP Impressed that this held up and closed over the 10 DMA with a risk now at 114.83 the 200 DMA and positive pivots
Shorts: On Focus List: CHKP SBUX MCK
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AAPL If breaks 99 could see at least 95
A Unconfirmed distribution phase. 57 max risk with 55.63 a gap fill below and room below that
UPS Unconfirmed bear phase not far from the 50 DMA or risk to around today’s highs. Under 96.00 could see a move to august recent low 94.87 and even lower
BIDU has to break 208.35 to fill an old gap, but for now, still a short unless it breaks out over 220
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
