My last week’s comments were filled with warnings-the double the average volume as S&P 500 made new highs last Wednesday-possible blow off rally; the shooting star possibility in NASDAQ last Thursday: that neither the Retail nor Financial sectors (ETFs) made new 2013 highs after the FED announcement; that the long bonds could not change to a more positive phase, even after flirting with it. But, my comments were also filled with hope-a bullish phase in all Indices, Semiconductors and Transportation sectors strong (both outperformed on Friday); the market still managed to close higher on the week. Regardless, there were several references to the logic of taking profits, not overloading on new positions and keeping trailing stops. What now? With uncertainty-talks of potentially halting the government, recirculating whether or not to raise the debt ceiling and all the other ways these influences make the market giveth then taketh away-watch price action mainly-and the phases-what happens at the 50 DMA should the indices correct that far. Also, continue to watch the long bonds. If all else fails, the $5 Million Rocky Mountain treasure is still waiting to be found! My homey, Forrest Fenn-trickster or real?
S&P 500 (SPY) Looks like a brick wall high. The fast moving average or around 170.04 could be support. Subscribers: Negative pivots in all indexes
Russell 2000 (IWM) Much better looking which brings me back to hope-watch this for a failure of 105.45 or a move back over 107.00
Dow (DIA) Similar to SPY only a bit worse since it only marginally cleared the old 2013 high to make a new one, failed with a potential brick wall and has the closest trip if continues south, to the 50 DMA.
Nasdaq (QQQ) Shooting star is when an instrument makes a new high and closes with a doji candle-then, confirms with a down day thereafter. But, not totally ready to throw in the towel-a lot will depend on early Monday’s action.
ETFs:
XLF (Financials) After failing to take out the old 2013 high, approaching some critical support at 20.30 level.
SMH (Semiconductors) Yes potential brick wall high-but long term, still looks good
XRT (Retail) After failing to take out the old 2013 high, look first at 81.55 then 81.00 as key levels of support
IYT (Transportation) Subscribers: Possible slingshot high if confirms
IBB (Biotechnology) Then there’s this-an inside day
IYR (Real Estate) Back to the 50 DMA. Subscribers: If holds these levels, might look to reenter
XHB (Homebuilders) Another topping looking formation
GLDI’m sure glad we’ve stayed away from here for now
USO (US Oil Fund)Unconfirmed warning phase but held the weekly loiw make on 9/17 which makes that low important
OIH (Oil Services)Yet another topping looking formation near term
XLE (Energy) 84.00 muy importante
XOP (Oil and Gas Exploration) This could easily recover from here-look at 65.00 first
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Got right to the 50 DMA but couldn’t clear. Watch that carefully.
UUP (Dollar Bull) Subscribers: Note the 2013 low 21.53
FXI (China) Subscribers: Guess what’s getting close to the 80 monthly moving average?
SGG (Sugar) Subscribers: Could recover, but Friday’s candle is a potential slingshot high
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:
REGN 2 inside days so have a super tight risk to Friday’s low should it hold 302.44 and clear R1
Category 2: (Pipeline) N/A
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)
PETM Slightly negative pivots. But, still looks ok if 72.35 holds
GILD Slightly negative pivots. Inside day with over Friday’s high clearing R1.
IGT Inside day. Slightly negative pivots. Over 21.18 also clears the 80 monthly moving average.
CHKP well outperformed. 58.05 risk point now and over 58.71 or so could continue with 2013 high 59.49
GNC Rallies while the market tanked. 52.50 good daily chart support now if good
SCSS Inside day holding the 10 DMA. Which makes 24.52 good number for risk
FOSL Inside day with good risk now to 116.00
Category 4: (Rip Tide) N/A
Phase Change:
KSS Held the 50 DMA making 52.00 still and important support level.
CAR Only like this if it clears back over the 50 DMA, R1 and Friday’s high. Reason still on list-the weekly and monthly charts looks promising.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
WSM If cannot clear 56.82 R1, then has more room to downside
ETE Phase change to warning unconfirmed. 64.40 good resistance and has to break 62.00 to keep heading south
CCI if cannot cross Friday high, then could see more south especially if breaks 69.99
WDC 64.86 good resistance and looks like it could be accelerating downward
COG Unconfirmed warning phase and cannot clear 38.22
Bye For Now
