Don’t Rock The Boat
Hues Corporation
Tuesday night I wrote, “Unless IWM (The Russell 2000) recaptures 118.80 and holds there, assume that under 114, another storm is coming.”
Wednesday’s session, the buffet the market feasted on the day prior, created bloat for lots of investors who overindulged.
The Bearish Phases in the Dow, S&P 500 and the Russell’s, along with the Distribution Phase in the NASDAQ are trends to respect.
For Bulls, rallies are opportunities for short-term momentum trades with quick profit taking. For Bears, rallies provide low risk short trades.
Like in the lyrics of the song title I warned, “Said I'd like to know where, you got the notion. To rock the boat, don't rock the boat, baby.”
In other words, that good old hackneyed phrase-The Trend Is Your Friend.
Bottom line, our daily 100-400 point swings offer all feasters tasty morsels. The caveat though, now is the time to graze rather than gorge, no matter what side you like to trade on.
And as I describe in the TLT commentary below, waiting for trend confirmation is especially important right now.
What about those intriguing interest rates?
Tuesday, the 20-Year Long Bonds (TLTs), broke the 50 DMA and entered an unconfirmed Bear Phase. Wednesday, the TLTs reversed and closed back above the 50 DMA.
For those who follow us consistently and for those new to MarketGauge, I remind you all that waiting for a second day confirmation before committing to a position is prudent. Especially lately.
Why do I count on the Russell’s?
Nasdaq 100, arguably in the best shape of the 4 indices, must hold 103.29 and clear 108.07. In its current Distribution Phase, the question remains on whether this too will have an eventual death cross.
Seems to me that if my Granddad of the Economic Modern Family, the Russell 2000 (IWM) can hold the September calendar range high at 114.12, NASDAQ should delight diners with a succulent main course.
However, since on the weekly and monthly charts, IWM has broken down from major moving averages, under 114, I’m guessing those same diners could experience food poisoning.
S&P 500 (SPY) Range remains the same-200 will be the next big resistance to clear with near-term support at 195, then 190 Subscribers: Negative pivots in all.
Russell 2000 (IWM) Watch 114 carefully, especially on a weekly closing basis
Dow (DIA) 159.74 last week’s low is best area of underlying support. 166.75 level the point to clear
Nasdaq (QQQ) 98.90-99.00 for now, looks inevitable unless this clears the 200 DMA above
Volatility Index (VIX) Bounce off the 200 DMA
XLF (Financials) Looks heavy or at least let’s see if can hold 22.00 now
KRE (Regional Banks) Still Fave sector ETF relatively speaking if can clear/close over 41.35 the 200 DMA and hold 40.00
SMH (Semiconductors) Perfect rally to and even briefly above the overhead 50 DMA resistance, but could not hold there. 50.00 pivotal
IYT (Transportation) 146 huge pivotal area with 141 next level of support
IBB (Biotechnology) Held over the 200 DMA (345.30) for a confirmed warning phase. Now, 342 must hold
XRT (Retail) Granny with a nasty red bearish candle. Support 90.75 unless it resurrects over 93.60
IYR (Real Estate) If bottom picking, this has support at the 200 weekly moving average or 68.36
XHB (US HomeBuilders) Another case of looking for a 2-day confirm. Back to a warning phase again.
GLD (Gold Trust) 108 the 50 DMA resistance and 105 support
SLV (Silver) Inside day sitting on the fast moving average. Interesting
GDX (Gold Miners) Hard to believe, but looks heavy still (again)
USO (US Oil Fund) 14.00 super pivotal if this has a chance to rally again
TAN (Guggenheim Solar Energy) Over 30.93 clears the 200 weekly moving average. 29.50 near-term support
TLT (iShares 20+ Year Treasuries) Returned over the 50 DMA for now back to an unconfirmed phase change to recovery. Again, a second close above the 50 DMA needed.
UUP (Dollar Bull) Will the FED risk a stronger dollar? 25.00 huge area to hold
FXI (China Large Cap Fund) Managed to close well relative to the SPY but couldn’t get close to 38-39.00 for best short trade risk
SGG (Sugar) Unconfirmed recovery phase
***Market Tone: Short-term Negative 2, Intermediate-Term Negative 5 and Long-Term Negative 4
NOTE: *All starred picks are from the automated list of picks (which now includes short picks!) denote that it has one or more of the 18 chart patterns we have used on the radar screen. For example, inside day, 2 days under floor trader pivots, phase change, brick wall or return to the 10 DMA, etc.
Longs:
AAL**
ALK
ALKS
AMZN
BYD
EQIX
FAZ**
FBHS
FBR
GNC
GOOG
HLF**
HUM**
INCY
JBLU
JCP
K
LEN
LGF
REGN
SCO**
SDS**
SQQQ
SRPT
STZ
TLT**
TSO
TZA
UVXY
VXX**
Shorts:
ADSK
CSC
DLTR
EQT
ETR
HCN
IVV
IYR
LAMR
LNG
MAC
MHFI
OMC
OXY
SRE
THRX
UPRO
WDAY
WHR
Best Best wishes for your trading,
Michele Schneider
