Looking at the market with a glass half full, the small caps or Russell 2000 had an inside day after making new 2013 highs Tuesday, NASDAQ made new highs closing marginally beneath them, the S&P 500 confirmed back to a bullish phase. Looking at the market with a glass half empty, the Dow closed down remaining in a warning phase. Concerning the sectors and groups, Real Estate resumed its recovery phase, Financials continue to lag, oil made a comeback along with the Exploration and Services groups (OIH, XOP), Retail closed green, while Transportation had an inside day. So, if I squint, it seems to me that the market is more banked on a government resolution than not-most likely before the week lets out.
S&P 500 (SPY) Over Tuesdays high will be a good sign and a break of the 50 DMA now, not so much Subscribers: Negative pivots in all indices except QQQ
Russell 2000 (IWM) Inside day near the highs
Dow (DIA) hard to get too excited if one looks here-best place to look for short opportunities if the market weakens
Nasdaq (QQQ) Has to stay strong for the others!
ETFs:
XLF (Financials) Still under the 50 DMA which remains troubling as a possible double top from July and September still in play
SMH (Semiconductors) Maybe through 40.40 it wil get some momentum back
XRT (Retail) 83.24 is the 2013 high to clear
IYT (Transportation) This will look better over 119.45
IBB (Biotechnology) Inside day
IYR (Real Estate) confirmed recovery phase-and an inside day
XHB (Homebuilders)
GLD Keep reading how bullish some are here-see no signs to be though unless it clears 130.00 Subscribers: Filled gap from Tuesday’s opening, which means watching for a short opportunity if it rolls over
USO (US Oil Fund)Through 37.65 expect more upside
OIH (Oil Services)Came back nicely putting this back on the radar
XOP (Oil and Gas Exploration) Didn’t disappoint
TBT (Ultrashort Lehman 20+ Year Treasuries) Through 76.12 expect to see rates rise a bit and talk of taper begin
VXX Subscribers: 14.96 the 50 DMA
EWG (Germany) Subscribers: Inside day
FXI (China) Subscribers: Inside day, confirms the accumulation phase and long on the opening range reversal
SGG (Sugar) Subscribers: Been calling the bottom here for some time, and now, an unconfirmed accumulation phase
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:
COF Tested the 10 DMA and came back to close just shy of pivots which are stacked negatively which means has to cross R1 69.75. Then of course, 70.00
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:
F inside day with max risk 16.96 the 50 DMA and like to see it clear 17.34
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy a 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)
LO Improved in condition and now needs a push through 45.60 with support 44.80
SCSS Inside day with tight risk to around 24.60. Has to clear 25.17 and overall, if can clear 26.00 looks good for a move to 32.00 or so
TEX 33.90 good risk as it is now crossing the 80 monthly moving average. Has to clear 34.85-95 to push to new highs
NSC Inside day and considering market action, this is performing well. Needs to hold today’s low and eventually push through recent highs
REGN If use today’s low as risk, have 2 inside days and both of them are doji.
Category 4: (Rip Tide)N/A
Phase Change:
EBAY Would take a shot over R1 and risk to around S1 and today’s low
KSS Now, if holds 52.00 perhaps its finally ready
K Yet another slingshot low today so tomorrow is the day to get in against today’s low for a swing if can hold around 58.80
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IBM If risk is inline, than this still looks lower overall
Category 6: White Cap-Having a 2-3 Day correction over the pivots.. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s lows
ANF Under S1 lines up with today’s low and risk is 36.06. Could make new lows
Bye For Now
