The index that went up the most during Wednesday’s session for a second day in a row is DIA or the Dow Industrials. I once again begin with this factoid as A) DIA had been the laggard B) with the move up today, it finally crossed and closed above the 50 DMA for an unconfirmed phase change to bullish. However, theRussell 2000s closed unchanged, the S&P 500 marginally higher and NASDAQ closed red. Why is this potentially significant? SPY and IWM still have 2013 highs made in early August to contend with while theQQQs could have had a reversal form new highs-that all depends on confirmation and whether it holds here or gaps lower Thursday. All indices are rich on the daily relative strength indicators, thereby, this move in the Dow could be a last gasp. Usually, I like to see volume on exhaustion rallies, but better than average volume seems to come in on down way more than up days. The interest rates dropped today-that could be another clue, especially since the Treasuries are holding August lows-that and that this is a commoditiesfueled rally still. Be that as it may, I began this week commemorating Jason’s birthday this Friday the 13th. Have you checked the children?
S&P 500 (SPY) 168.26, Tuesday’s gap low is important to hold. Otherwise, we are looking at the 2013 high as resistance Subscribers: Positive pivots in all indices.
Russell 2000 (IWM) 105.63 is the 2013 high.
Dow (DIA) Cleared the 50 DMA for an unconfirmed phase change to bullish
Nasdaq (QQQ) Over 78.26 negates the possible topping action
ETFs:
XLF (Financials) Confirmed phase change to bullish. Has to hold the 50 DMA
SMH (Semiconductors) 39.72 the 2013 high to clear for sustained rally. Inside day.
XRT (Retail) Confirmed phase change to bullish. Has to hold the 50 DMA
IYT (Transportation) 2013 highs next hurdle
IBB (Biotechnology) Resting
IYR (Real Estate) Looks like some bottoming formation intact with overhead resistance in its path
XHB (Homebuilders) Anticipating a rate drop in its return to a bullish phase?
GLDInside day in nowhere land
USO (US Oil Fund)50 DMA support close by
OIH (Oil Services)New multiyear high!
XLE (Energy) Cleared 84.00-needs to stay above it
XOP (Oil and Gas Exploration) New 2013 highs-now we are looking at 2011 highs
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs through 104 could change the equation for rates
SGG (Sugar) Subscribers: If this drops to 58.50 or so, we will have another opportunity
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) 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:
GMCR Inside day. Now, has to clear 86.75. Hold today’s low
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can eitherbuy 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)
FDX Key with all picks now so close to highs is risk. This one have to use today’s low max and move through today’s high
TRIP Inside day. Long ½ position after booking ½ ATR. Has to hold 72.67 and clear today’s high to keep going up
WAG ORR preferred here against 50.18 and if rallies, then 50.40 or so
HCA Long for a swing. Waiting for it to clear 40.00 and now has to hold 39.00
MDVN 59.86 is all I would risk and has to clear R1 to continue up for more minisiwng trade
FOSL Prefer an ORR here too against the 10 DMA. All about risk although this one could be a late bloomer
Z More miniswing trade now if can hold 97.00 with target 103 the 2013 highs
LTD Once again prefer an ORR to control risk to the 10 DMA
Category 4: (Rip Tide) N/A
Phase Change:
KSS If this can hold 51.70 still interesting even though it broke the 50 DMA-that could easily clear again
FSLR 38.80 now area to hold and has to clear 40.14
LO Got the dip today. Now, 43.89 is the 50 DMA to hold and like over 44.20
CLH 56.90 could low risk are and over 57.25 would take a shot
JBLU See this as a growth company. Inside day against against the 80 monthly moving average 6.08. It crossed 3 moving averages this week-10, 50, 200. Confirmed bullish phase and had an inside day
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MJN Inside day and sitting right on the moving averages-the way this breaks follow up or down.
UNP Has neutral pivots and cannot clear 158.22 the 50 DMA is. If breaks 156.60, could be good short to hang onto especially if the market breaks
Category 6: N/A
Bye For Now
