Bum, bum, Bailey O! -buy the reversal off the low! Sounds so easy, a child can do it. A child named Russell perhaps, as it comes as no surprise that the weakest one runs up first.
But where did IWM run to? Did it clear 109.75-110? No. How about theNASDAQ even with the upgrade in Tesla and Twitter today? Did QQQs clear 98.00? No. Okay, how about the S&P 500; surely that made it over the resistance at 196.05? No? That leaves you Dow Industrials. Big blue, what do you have to say for yourself? Did you clear 170? Not even close you say?
What does it all mean? No phase changes, just confirmation of the warning phases we witnessed on Wednesday. Yes, relief from the oversold conditions, feasible optimism ahead of Friday’s jobs report, but, that’s really all for now.
QQQs, DIA and SPY did not clear pivots. First off after the open, the mid pivots must clear. Secondly, the resistance levels aforementioned must clear. Finally, those levels must hold. Then, we can possibly sing “10 Bears in the Bed and the little one said, I’m crowded roll over. So, they all rolled over and 9 fell out. There was one in the bed and the little one said, I’m lonely.”
S&P 500 (SPY) Although there is support all the way down to the 200 DMA, 197 now massive resistance and a place to consider selling into Subscribers:Negative Pivots in all except IWM
Russell 2000 (IWM) New 60 day low and reversal. However, besides the resistance at 110, there is the weekly moving average breakdown at 111.70. For now, this rally seems more of a sell opportunity. Why? Volume was much greater on the selloff.
Dow (DIA) 169.00 resistance and not nearly as impressive a rally as the one in IWM
Nasdaq (QQQ) 98.00 resistance with support all the way to 94.00, the August low. Confirmed warning phase
XLF (Financials) Confirmed warning phase with the overhead 50 DMA 23.04 well within its reach
KRE (Regional Banks) News 60 day low and reverse which makes this interesting if confirms.
SMH (Semiconductors) Weak close and could not clear 50 DMA
IBB (Biotechnology) 265.90 is the 50 DMA which held. 2 thoughts: this is where to go for strength. Under today’s low watch out.
XRT (Retail) Rallied well back over the 200 DMA for a now unconfirmed phase change improvement if holds
IYR (Real Estate) Has not given a buy-until it clears the 200 DMA
ITB (US Home Construction) One of the first to sink and now had a decent rally. Maybe double bottom
GLD Unless you are short from higher levels, do not see much
Metals and Mining (XME) Possible reversal near 2013 lows. GDX as well
USO (US Oil Fund) Possible reversal candle here too
FCG (First Trust ISE Reserve NatGas) Subscribers: Really oversold so will watch
TAN (Guggenheim Solar Energy) Subscribers: A hold of 39.35 level would be a better place to think about buying again
TBT (Ultrashort Lehman 20+ Year Treasuries) TBTs no more island bottom but
TLTs still have an island top
EWW (Mexico) Subscribers: Over 68.30 better if holds 67.15
FXI (China Large Cap Fund) Like this reversal if clears 37.82
CORN (Corn) Subscribers: Confirmed slingshot with the 10 DMA to clear
SGG (Sugar) Subscribers: watching to see if it is bottoming
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:
LM Cleared the 10 DMA and now if holds around 50.40 the pivots over R1 or 51.21 looks good
MU Long small swing position on the ORR. Over R1 34.28 can consider an add as this is a strong stock
Category 2:N/A
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)
PANW A Nugget that had a good run today clearing the 10 DMA and now has to hold 95.00 max risk
TWTR Great reversal now has to hold 50.50 and over 51.70 could tackle the highs
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
CSIQ Made a joke about buying this on the lows with Buffet’s money. But it did hold the 50 DMA and has R1 now 35.70 to clear
Phase Change:
PNRA Hammer candle but over the 200 DMA 162.56-watch for an ORR mainly to control risk
PM Sorry about this one-good lesson in sticking to the plan. Now, if confirms over the 200 DMA, still good if bottoming has a lot of room so let’s look fresh
NVDA Reversal candle over the 200 DMA-looking for confirmation and like this since over the 80 monthly this year
D Had a good daytrade in it and now has to clear 69.70 with risk to 68.93 the 200 DMA
SWI-Made a huge move today. Missed the best risk but keeping it here in case it clears 42.77
LEN Broke out end of day over the 50 DMA and now if holds today’s lows, and 38.50 even with resistance overhead looks good
BXP Only interested now if clears 117
P 23 is big support with a big move today, like ORRs in this one to control risk
Shorts: On Focus List: SBUX SBAC ARCC A
Category 5: N/A
Category 6: N/A
Best Best wishes for your trading,
Michele Schneider
