As tempting as it is to comment about, blame people or just plain regurgitate the recent events from the government shutdown to the shooter to the talks of Octaper-one thing I hope I have made clear…We have been and continue to be a market full of notable diversions! The small caps and NASDAQ had to stay strong for the weaker siblings or the warning was to watch out! Yes folks, it’s me, live from the technical bubble! The topping candle in the S&P 500, warning phase in the Dow, faltering financial and real estate sectors, Retail unable to take out 2013 highs, just some of the recent concerns over the last several weeks! The bright spots had to remain luminescent-more than luminescent-as bright as the brightest protein-see title-and alas, they fell to the pressure. Now what? For starters, if we go to the light, the small caps have last Friday’s low for possible support. Ditto for NASDAQ. If they can both hold and firm up from Thursday’s selloff, better. If not, Hello 50 day moving average down below.
S&P 500 (SPY) BigDistribution day in volume back to unconfirmed warning phase-not a pretty day Subscribers: Negative pivots in all indices
Russell 2000 (IWM) Under 105.24 lives the 50 DMA at 104.20. Over 106.90 lives salvation.
Dow (DIA) The 200 DMA below at 146.73 is a magnet for this sick index
Nasdaq (QQQ) Last Friday’s low 78.00 under that the 50 DMA 77.11.
ETFs:
XLF (Financials) 19.49 was September low.
SMH (Semiconductors) Last Friday’s low was 39.37-pretty far away which means if the market improves, look here
XRT (Retail) I was really hoping I wouldn’t have to think about a double top in this sector. With an outside range top and bottom to Wednesday’s range, now I do.
IYT (Transportation) Landed on the 50 DMA-another place to look if market holds.
IBB (Biotechnology) The bigger they are…but not giving up here yet
GLD Considering the environment of uncertainty, Thursday’s rally is still unimpressive. Inside day-Friday should be more decisive
USO (US Oil Fund) Subscribers: Maintained positive pivots today so watch 36.93 to hold
XOP (Oil and Gas Exploration) Looks like it’s not done yet
TBT (Ultrashort Lehman 20+ Year Treasuries) Through 76.11 expect to see rates rise a bit and talk of taper begin
VXX Subscribers: Unconfirmed recovery phase
EWG (Germany) Subscribers: 2 Inside days-that’ll be worth watching
FXI (China) Subscribers: Like to see 37.23 hold now
SGG (Sugar) Subscribers: Been calling the bottom here for some time, and now, an confirmed 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:
AFL Like that R1 and today’s high line up with risk to today’s low for possible new highs
Category 2: (Pipeline) 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)
CF Inside day and sitting on the 10 DMA making today’s low a good risk. Over 213.90 could see new highs
BEAM Inside day. Like 66.00 as close risk and over 67.00 should continue up move
CLR EOG Mainly daytrade to miniswing because of high weekly/monthly RSI. 2 inside days so use today’s range for risk and breakout point
CIEN Today’s low is a great risk and over 26.00 would take a shot to see if it can get to new highs
LO Over 45.60 should keep it going with today’s low max risk
SCSS Really like the consolidation here and would have been a buyer today if the market was better. Now, through 25.20 like the risk to the 10 DMA 24.75. Could see 32.00 or so which means good to stay for swing
Category 4: (Rip Tide) N/A
Phase Change:
K Long partial on confirmed slingshot and since we bought the Opening range reversal, will risk to under S2 for swing.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
JOY 51.87 max risk and looks like a drop under last Friday’s low could be a good blow
TWC 112.22 good risk with continued weakness looking at 105 next support
SPG 151 max risk and looks like it could head to new lows
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
CLF Under S1 will look like a bear flag breaking with risk to 21.62
Bye For Now
