Impressive day as the market found relief from good numbers out of China and a seemingly more willing to cooperate, Assad. But, aside from the news and fundamental factors, looking strictly at the technical situation, I wrote last week that small caps had to come into play-the Russell 2000 did indeed manage an unconfirmed phase change to bullish (as did the S&P 500), while NASDAQ, which had been leading the charge, continued onto new 2013 highs. The holdout remaining in a warning phase is the Dow Industrials. In fact, as the other indices shine, they do so at the cost of getting a bit extended on the relative strength indicators. That could mean that by the time the Dow reaches the 50 DMA (or cannot reach the 50 DMA) time to take profits on longs. Another anticipated outcome is the rotation to sectors that rely more on the easing of interest rates. Real Estate, Homebuilders, Transportation, and Financials caught some wind Monday. Semiconductors as well. This means that besides watching the lagging blue chips, watch these groups carefully as well, since the real test of sustenance is keeping all of these eagerly in rally mode.
S&P 500 (SPY) Unconfirmed Bullish phase which has to confirm from here. Also, has a gap to fill to 168.38 Subscribers: Positive pivots in all indices.
Russell 2000 (IWM) What I wrote over the weekend, “Higher open, going to take a more bullish bias all around.” Check and check. Now, the 50 DMA is important here as well
Dow (DIA) 152.25 is the 50 DMA to clear-still a bit away
Nasdaq (QQQ) Opened higher and really, never looked back. Good leadership!
ETFs:
XLF (Financials) Once crossed 19.93, strong close though not yet over the 50 DMA at 20.16
SMH (Semiconductors) 39.16 some daily chart resistance. Now, the 50 DMA totally the place to hold. Subscribers: Long ½ and using the 50 DMA to calculate risk
XRT (Retail) Crossed 80.00 which helps the case, although still in a weak warning phase
IYT (Transportation) Unconfirmed bullish phase-needs to stay here
IBB (Biotechnology) Back to its ole self-on new highs.
IYR (Real Estate) Will look at 62.70 as key support to hold for this rally to sustain with 65.50 the 50 DMA resistance
XHB (Homebuilders) Impressive move today! This cleared the 50 DMA and is now in an unconfirmed bull phase. Look for 29.88 to hold.
GLDInside day. Watch which way the range breaks.
USO (US Oil Fund)After Friday’s gap up to new highs, today was a digestion day. Still holding the upward sloping 10 DMA.
OIH (Oil Services)New multiyear high!
XLE (Energy) Subscribers: Ultimately, this move doesn’t mean all that much until it clears 84.00
XOP (Oil and Gas Exploration) Subscribers: Made new multiyear highs today!
TBT (Ultrashort Lehman 20+ Year Treasuries) Subscribers: If the Fed has any intention of buying bonds, the TLT chart has to hold 102.11 and clear 104.50 next
UUP (Dollar Bull) Confirmed the Distribution Phase.
EWG (Germany) Subscribers: Elections here September 22nd. Now in an unconfirmed Bullish Phase.
FXI (China) Gapped higher and is looking strong.
SGG (Sugar) Subscribers: Look at today's low now for an entry point or support as it cleared the channel
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
**NOTE: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.
Category 1: (Aloha) N/A
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)
GMCR Improved in condition to a 1. Like on reversal or breakout against the 10 DMA. Has potential to 90.00 area first
NAV Like on reversal or breakout agent the 10 DMA. Some resistance at 35.90 but over July highs has lots of room
FDX Inside day on the 10 DMA with support nearby at 108.08 S1 and over 109.80 looks like move to 113-114 next
CTXS Cleared the 10 DMA. Look at an opening range reversal against the 10 DMA or breakout over 72.40
LTD Improved in condition. Support 55.60 to hold and has to clear 58.40 to stay firm
JBL Really has to clear 23.70 and hold 23.00 to get going for a longer term move
LNC Through R1 44.47 looks good with possible new highs within reach. 43.15 ultimate support to hold
Category 4: (Rip Tide) N/A
Phase Change:
AAPL Gapped higher which means has to hold today’s low best risk
KSS 2 Inside days and 2 days under pivots. Like this on a breakout over today’s high which line up.
FCX Unconfirmed phase change to accumulation. Like on a reversal against the 200 DMA
FSLR Inside day and over the 200 DMA unconfirmed phase change back to warning. Long for swing against Friday low
LO confirmed the bullish phase and like on a reversal or breakout with resistance around 46.00
BZH above converging moving averages with today’s low max risk. Over 18.27 the 200 DMA should keep it going
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
SODA Has to break recent lows at 61.40 and not clear 63.25
Category 6: White Cap-N/A
