Ever since the Labor Department reported the lowest participation rate in employment since 1978 followed up by a weaker than expected retail sales last week-it seemed clear that buying the bull phase and the comments I’ve been making about the trend pointed to exactly what the FED did today-no TAPER! The only folks still spooked by that possibility had been the media-oh yes, and the perma bears who love to call tops. Ouch! So, why would tepid economic numbers lead to this rally and the recent rally in general? Traders counted on a dovish FED to keep the economy moving in the right direction. And so they did not disappoint. The biggest percentage gainer post FED was GLD. It soared leaving the island bottom I have been writing about as a warning to not get short in spite of its recent sell off. Blast off to an unconfirmed recovery phasewith the 129-130 levels key areas to watch hold. Now, I never got much longer in our portfolio since the beginning of this week and in fact, suggested taking profits, leaving trailing stops on balances. So, I will say this-Wednesday’s action in the S&P 500 and the other indices could very well be a blow off rally. Could be.Double the average volume on new highs? Let’s just say take it for what it’s worth-try to stay one step ahead instead of behind and let the market guide you!
S&P 500 (SPY) As mentioned, double the average volume on a huge run up-possible blow off or just the start of something bigger. Pick your spots carefully. Subscribers: positive pivots in all indexes
Russell 2000 (IWM) Not quite the same cache on volume-accumulation but not crazy huge. Watch here.
Dow (DIA) Volume spike and new highs. More importantly, noted the gap higher, the near inside day and the notion that something big was coming. 156.24 the old 2013 high to hold
Nasdaq (QQQ) Like the small caps, accumulation and not alarming volume on its climb to new highs. 78.70 now should act as support
ETFs:
XLF (Financials) Still has not gotten to the 2013 high from July-20.93
SMH (Semiconductors) If my world were semiconductors alone, I would say buy every dip!
XRT (Retail) Also has to clear 2013 highs 83.24-and my bet as the best one to do it if market holds
IYT (Transportation) New highs-no more double bottom fears and another place to look for opportunities longer term.
IBB (Biotechnology) Let this be a lesson to all who doubt a trend!
IYR (Real Estate) Unconfirmed phase change to recovery. Like to see some digestion against the 50 DMA now
XHB (Homebuilders) Blast off but not new 2013 highs yet
GLDI have a couple of favorite technical patterns and island bottoms is sure one of them.
USO (US Oil Fund)Unconfirmed phase change to bullish
OIH (Oil Services)New highs-
XLE (Energy) New 2013 high and wrote a lot about 84.00 to clear
XOP (Oil and Gas Exploration) Beauty-been liking this too
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Got right to the 50 DMA. 104 pivotal and above the 50 DMA might see more upside
SGG (Sugar) Subscribers: 59.25 cleared and will look at a new long now for sure
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)N/A
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)
GMCR As long as 85.70 are holds looks good-but would trade this tight till it gets clear of recent resistance
YY 47.00 area should hold and looking for new highs
F If this clears 17.70 could go to 25.00-26.00. And really, want to see it hold 17.60 now
RHT Like everything made a huge run end of day. Now through 54.00 looks good on daily and weekly with possible move to 59.9 or so Risk 53.20 or so
COST Now around 118.50 should hold if good for new highs
OI Cleared 31.00 so will look for another opportunity possibly an ORR.
FOSL Like this if holds 115 now.
PETM At this point let’s wait for R1 to clear and use a stop under 73.25 or so
SCSS Was on list and made a big move up. 26.00 should clear but like the support now at 25.00
GILD Using a tight stop under 64.00 would consider this now on new highs for more miniswing trade
Category 4: (Rip Tide) N/A
Phase Change:
FSLR held the 200 DMA and starting to pull away. Really needs to clear 40.00
C Look for an ORR against the 50 DMA
KSS One of my faves for tomorrow. 52.00 is key to hold with upside potential
Shorts: No real good setups right now
Bye For Now
