Rather docile, slow grinding rally to end an already strong week. Some equivocation by the “experts” on whether or not the FED will taper given the tepid retail sales number. Whatever, the Dow continued to firm, along with the small caps while NASDAQ napped, but on a firm mattress. S&P 500 had an inside day as well, which gives us a pretty clear signal for Monday that the way the range breaks should set the tone, for the beginning of the week anyway. Of course Biotechnology performed the best and outperformed the overall market while Semiconductors (yay) came in with not such sloppy seconds. Lots of great setups for the savvy stock picker to focus on provided the world behaves itself.
S&P 500 (SPY) 168.26, Tuesday’s gap low is important to hold as the daily chart formation looks like a strong island very close to 2013 highs. Subscribers: positive pivots.
Russell 2000 (IWM) 104.10 good support level to see hold with 2013 highs within reach. Subscribers: Positive pivots.
Dow (DIA) All good provided the 50 DMA holds Subscribers: positive pivots.
Nasdaq (QQQ) 77.30 key support while the 2013 highs are really super close Subscribers: positive pivots.
ETFs:
XLF (Financials) Ended the week right on the 50 DMA. Like to see Friday’s low hold with a new close over the 50 DMA for confidence
SMH (Semiconductors) 39.72 the old 2013 high ending the week with an inside day
XRT (Retail) Held 80.00 and now over 81.00 should continue up. Inside day
IBB (Biotechnology) More to go it seems
IYR (Real Estate) Inside day and like to see it clear 64.32
XHB (Homebuilders) Hanging tough over the 50 DMA
GLD With all its pressure, the island bottom from June remains intact
USO (US Oil Fund) Calling it more sideways with upside potential as long as the 50 DMA holds
OIH (Oil Services) Resting but still looks ok
XLE (Energy) Closed back under 84.00 which may or may not mean much-really depends on how this group gets started come Monday morning
XOP (Oil and Gas Exploration) Inside day while it pauses near new highs
SGG (Sugar) Subscribers: If this drops to 59.00-58.50 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: There were so many great setups Matt and I had to make selections to narrow down the choices. If you see something you like, please tweet me about it and I can comment accordingly. Also, some picks that we are already in or liked last week and might still be setup are eliminated like JBLU CBST HCA.
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:
MAS Consolidation over the moving averages both long and short term. Risk Friday’s low and over 21.00 could see more
PRU For a swing could risk down to the 10 DMA at 78.38. For a mini, risk to Friday’s low and has to clear Fri high
JBL Good correction risk to Friday’s low. Over 23.82 R1 like for more upside
Category 2: (Pipeline) N/A
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)
ALXN 2Inside days. Over 114.65 looks good for move to 120 or so. Risk Friday’s low-more miniswing trade
CIEN Looks like it has more to go with risk a bit shaky so have to use 24.60 S1 if clears last week’s highs.
CSIQ 13.69 should hold with now 3 months holding the 80 monthly moving average.
F If this clears 17.70 could go to 25.00-26.00. Risk is now 17.10
FOSL Inside day. Now, has to clear 117 and hold 115 area
OI Inside day. Friday’s low good risk on the 10 DMA as well. Just crossing the 80 monthly if it holds up
MAR 2 inside days. Best risk is Friday low and should break Friday high with 2103 high some resistance for now
HES 2 Inside days. 77.00 max risk and move over R1 a good signal which also put it close to multi-year highs
DOW Inside day-a railroad track pattern on the daily. 38.70 max risk and should clear recent highs to keep going
Category 4: (Rip Tide) N/A
Phase Change:
USG 26.63 pushes it over the 200 DMA and R1. Then can use the low of the day that happens as a low risk
ALK Inside day on the 50 DMA which is now max risk with 60.83 R1 to clear
SCSS Tested the 50 DMA now max risk with a move over 24.70 good confirmation it should move.
Shorts: No shorts for now
Bye For Now
