When I woke up Tuesday morning, I felt so relaxed. My portfolio had tails left of a few positions all deep in the money and with little risk exposure. I felt ready for anything. Then there was the plan to only look forstrength after the recent correction as long as the risk was in line. Furthermore, I instructed my subscribers to not bottom pick, rather, see that as a sign of further weakness to come. I also gauged the pulse of the day on 3 factors-the small caps or Russell 2000s. They had to hold the fast moving average and run up to give me confidence. Second, I watched the real estate and financial ETFs-both of which were down and remained so throughout the day. Finally, there were the long bonds-if rates continued to drop, then I would perceive that as both bad and good news, meaning, the FED is keeping the juice flowing while investors are viewing the economic condition as weak. Bottom line is this. The plan right now is to take it easy! Just proofreading my plan, my relaxed state starts to slip away. I can see that the variables are numerous and out of synch. Oneindex does well, 2 sectors do not do well, rates drop-it’s enough to make any active investor’s head spin! My advice now? Heed the warning of the financial sector, keep hope alive with the small caps, but trade anything new light and tight.
S&P 500 (SPY) Law of attraction looks like the 50 DMA is next. That would change if it clears Monday’s high Subscribers: Negative pivots in all indexes but IWM
Russell 2000 (IWM) Easier to gauge this now based on Monday and Tuesday’s lows. If they fail expect more weakness all around. If not, don’t get too caught up on the short side.
Dow (DIA) On the 50 DMA-no surprise really considering this was so close to it coming into this week. Now, if holds good. If not, expect a domino effect
Nasdaq (QQQ) Inside day. That means under Monday’s low trouble. But if can clear 79.50-back to a leading position
ETFs:
XLF (Financials) Warning phase now. Unless it clears back over the 50 DMA, stay clear.
SMH (Semiconductors) The new IBB of 2013?
XRT (Retail) DOJI holding the 10 DMA. Also key so watch this too.
IYT (Transportation) Held Monday’s low making that important now
IBB (Biotechnology) Inside day.
IYR (Real Estate) Bear phase confirmed with 63.85 the place to see hold
XHB (Homebuilders) Nice day thanks to Lennar
GLD Subscribers: 125.15 is key to hold and if does, over R1 could be interesting
OIH (Oil Services)47.00 area of support
XLE (Energy) Topping candle from last week still a factor even if 84.00 is interim support
XOP (Oil and Gas Exploration) Made a move but didn’t close as well as it should have all things considered-mainly the topping candle from last week
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs got a confirmed phase change to recovery
EWG (Germany) Good correction to start watching for an entry point
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 inside day. Like to see today’s low hold and this clear R1.
CRM Good correction if 51.20 holds. Then, has to clear the pivots and R1.
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)
AFL 2 doji days in a row. Over 62.50 could be good to 2013 highs
ETN Big move today so on watch for an ORR
FOSL 117.40 new risk to trade on and still has to clear today’s high.
GCI If holds 25.50 then looks good with over 26.00 a nice confirmation
IGT Inside day with Monday low good risk. Like to see recent highs clear which will also clear the 80 monthly moving average
CBI 65.26 good risk point for reversal and over 67.00 could see another 2.00 or so
DVN If holds Monday low, looks poised for more upside. Remains under the 200 weekly and 80 monthly moving average so consider that overhead reisistance
Category 4: (Rip Tide)N/A
Phase Change:
MCD Long ½ position which will like a lot better if clears 98.50 and holds 97.00
WY Heard there were a lot of April $31.00 calls bought today. Inside day right on the 50 DMA which means 28.17 good risk with move over 28.80 confirmation
CAR 29.65 area should hold now as it has an unconfirmed phase change to bullish
AGO Slingshot low if confirms tomorrow against 18.42. Pointing out since so many of these work well.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
SPG has gone down for days, but if market continues weak could see 148 and lower. Risk now 151
MNST Hovering on the 200 DMA so if breaks could see 45 or so
Bye For Now
