We came into this week expecting a possible trading range expansion with the caveat that how the indices closed was more key than how they behaved intraday. Furthermore, we also anticipated amuted start of the week ahead of the FED meeting, possible Scottish secession, Alibaba IP, plus all the rest of the potential horror shows circling the globe.
However, we also believe that this week will go out with a bang. Til we have clarity on which side of the gun the market will be on (shooter or shootee), best to keep trading more active-day trades to miniswing trades.
Concerning indices, the DIA was the star holding 170 yet not closing strong enough to impact the Russell 2000s which said goodbye to both the 50 and 200 DMAs. SPY did the “break the trading range low intraday” thing only to trade back above it and finally, NASDAQ with some huge momentum name drops (TSLA NFLX Facebook), gave up 99.00 yet held the upward sloping 50 DMA handily.
Energy, Oil and Metals saw a bit of a relief today. Otherwise, the major sectors and groups except for the Financials closed decidedly red. One thing seems certain, all eyes are on the FED and the nextdirection for rates.
No matter what happens, opportunities always present themselvesand those with patience and a system will be rewarded for having both.
S&P 500 (SPY) Still appears to be coiling and will like better over 199.41 Subscribers: Negative Pivots in all except DIA
Russell 2000 (IWM) Since July, this has lived in its own sad universe. Monday, it went into an unconfirmed distribution phase
Dow (DIA) Coiling and in much better shape now than the rest
Nasdaq (QQQ) We got the break to the downside, but with a strong upward sloping 50 DMA below, not too negative regardless
XLF (Financials) Range bound but solid
KRE (Regional Banks) There’s the start of the consolidation expected-has to hold up over the 200 DMA
SMH (Semiconductors) Close to the 50 DMA and could be setting up for a low risk buy
IYT (Transportation) Rangebound
IBB (Biotechnology) 265 held which is a good support area
XRT (Retail) Last week’s low 87.68 now has to hold
IYR (Real Estate) Oversold for sure
ITB (US Home Construction) Inside day and still possibly coiling
GLD A little bit of a relief
OIH (Oil Services) Maybe this has bottomed for now
XLE (Energy) Maybe this too has bottomed for now
XOP (Oil and Gas Exploration) Subscribers: New low then closed back above the 200 DMA-needs another day to decide where it wants to go next
FCG (First Trust ISE Reserve NatGas) Subscribers: Maybe this has bottomed for now
TAN (Guggenheim Solar Energy) Subscribers: Huge drop which will give us a buy opportunity at some point-space was getting crowded
TBT (Ultrashort Lehman 20+ Year Treasuries) Confirmed the recovery phase
UUP (Dollar Bull) Totally Consolidating
IFN (India Fund Inc.) Could be getting ready again
FXI (China Large Cap Fund) 40.00 to 40.30 key support especially after the island top
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:
SWK Inside day. Has to hold 91.30 and clear 92.05 first then all the recent resistance if good
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:
INTC Still looking like an orderly correction with 33.84 the 50 DMA and over 34.80 clearing R1
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)
RSG 38.95 max risk and good over today’s high 39.28 for swing
LMT Had an ORR today then a breakout. Now, over 176 setup for a day to miniswing trade
IBM Reason market held up. Now, 190.50 major support and over 193 really good
ETR If holds 75.29 after an inside day, over 76.40 clears the highs R1 and the 10 DMA
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
HPQ 35.75 the 50 DMA to hold and over 36.50 looks better
Phase Change:
LPX had a big day and now prefer to see an ORR against 14.11
LEN Inside day with 39 support and has to clear 39.55
SPLS Inside day over the 200 DMA making 12.58 max risk with a move over 13.05 needed
PXD We are in with a wide stop and if good, should clear 204.75 next hold 202.50
PHM Inside day and unconfirmed recovery phase. The overall chart looks good if clears 19.24 the 200 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CCJ Under 18.50 could see lower levels with risk 19.05
SINA Big move down but now, if has an OR high failure can control risk to 47.50 area
BID Only good with an OR high failure
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 low
MOS Classic with resistance 46.86 if breaks S1 and today’s low for a move to maybe 40.00
Best Best wishes for your trading,
Michele Schneider
