I wish I had some amazing words of wisdom other than repeating what I have been already saying since thepeak high last week. The small caps continue to try the hardest coming really, really close to the 2013 highs before retreating end of day. The Dow has now entered into an unconfirmed warning phase as it was closest to the 50 DMA and like a magnet, found it undeniably and uncontrollably attractive. The sectors and groups are busy correcting; the rates are dropping and the emerging market ETFs are hanging tough. There are the overachievers outperforming and the underachievers taking it real hard on the chin. Here’s something-the VXX-could be time to look at this archaic instrument as it seems to have matched the peak highs with a possible peak low.
S&P 500 (SPY) Law of attraction looks like the 50 DMA is getting closer. That would change if it clears 170.50 Subscribers: Negative pivots in all indexes but IWM
Russell 2000 (IWM) 105.80 better hold or our hope will greatly diminish.
Dow (DIA)
Nasdaq (QQQ) Such an orderly correction but a correction nonetheless unless it clears 79.00
ETFs:
SMH (Semiconductors) Acting like the new IBB by barely moving
XRT (Retail) Not a pretty candle, but holding the fast moving average
IYT (Transportation) Predicts this sees the 50 DMA real soon
IBB (Biotechnology) As the queen bee, she seems to be running low on worker bees
IYR (Real Estate) Held 63.85 but so what til it gets back over the 50 DMA
XHB (Homebuilders) Inside day
GLD Subscribers: Cleared the 10 DMA now looking at that upward sloping overhead 50 DMA
USO (US Oil Fund)August low 36.35 getting close
OIH (Oil Services)47.00 area of support
XLE (Energy) Topping candle from last week still a factor
XOP (Oil and Gas Exploration) Has to clear 66.80 now
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs keep it rocking
VXX Subscribers: Inside and doji day with 13.69 nearest support-like it over 14.09
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: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.
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)
CRM 51.93 now support to hold and rennet highs to clear to see new ones
AFL 2 doji days in a row and now an inside day. Over 62.50 could be good to 2013 highs
ETN Got the ORR and now a doji day-one push could get this going with risk 69.30
RDN Improved in condition. 13.60 max risk with another one over the 80 monthly moving average this year
BYD near highs but pushing the 80 monthly with 2 inside days. Risk is 13.80 and can also use today’s low
IGT One of my favorite picks to watch as it test and held the 10 DMA. Since it has slightly negative pivots, 20.75 is all I would give it now for risk
MBT A bit high on the weekly RSI but over the 2013 highs could keep going since also cleared the 80 monthly moving average
OI Inside day. Through 31.06 also negates the slingshot high and since it’s over the 80 monthly moving average, has potential
Category 4: (Rip Tide) N/A
Phase Change:
JPM Slingshot low if confirms over today’s high. The swing risk is under 50.06 and for a closer risk can use 50.55
WY 2 inside days which means today’s high has to clear and the 50 DMA has to hold
CAR DOJI day on the 10 DMA but now has to clear 30.71
AGO Now that is what I call a follow through to a slingshot low! Now up to the 200 DMA resistance-if long stick-if not, have to see the 200 DMA clear
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ETR Risk max is 65 but can also use R1 64.11. 61.75 to 62.00 next support
UNP Been on our list before. Now has an unconfirmed phase change to warning. Max risk the 50 DMA 158.20 and although nearing a low daily RSI, could see a good move down to 154.00
EXPE Like 52.26 as risk and could see move down to 50.50 next
IBM Unconfirmed bear phase. Max risk is either 191.65 could also use 190.61 then could see 186.50 next
CAT Unconfirmed bear phase with risk 85.22 and could see drop near recent lows
TDC Inside day max risk today’s high and could see 55.50
Category 6: N/A
Bye For Now
