Ok, show of hands, how many of you started to think about the word “rigged” again watching the market and your equity go up and down faster than you can say “sacrificial lamb?”
Is the market rigged or merely a reflection of the new worldwhere information travels in nanoseconds, folks have easy access to that information and with a simple click of a button can buy and sell confounded by a collective psychology where one minute investors are freaked out over deflation, the next minute about war, the following minute about rates and in the final minutes-who cares about anything; F*#$ it, let’s just BUY!
Reviewing the technical roadmap and trying to keep a level head, the week ended with indecision with a hint of bullishness along with the usual diversion between the small caps and the other indices.
S&P 500 managed to claw its way back over the 50 DMA for a return to an unconfirmed bullish phase. Of course, the Dow, which never broke the 50 DMA, closed squished between that and the 10 DMA. The IWM held 110 like its life depended on it-which it does incidentally- and closed relatively unimpressively with an inside day-albeit green.
SPY, DIA, QQQ and IWM had inside days. That’s almost humorous as this market relentlessly teased the bulls and bears last week and begins this week equally indecisive. Reminds me of Lancelot in Merchant of Venice as he ponders, should I stay or should I go?
S&P 500 (SPY) Eked over the 50 DMA and with the inside day, has to clear last Thursday’s high 199.05 to look better Subscribers:Positive Pivots in all
Russell 2000 (IWM) Oh sweet 110 of life how much I love thee-for now anyway. Inside day-has to clear 11.83 at least
Dow (DIA) Compressed between the fast and the furious 50 DMA
Nasdaq (QQQ) Cleared an important level at 98.05. Now that has to hold and next place to clear is 99.20
XLF (Financials) Express train to the 50 DMA on Thursday, the local train to R1 on Friday. Inside day as well.
KRE (Regional Banks) Inside day and red-oops-precursor?
SMH (Semiconductors) Squeezed between the 50 and the 10 DMAs with an inside day
IBB (Biotechnology) As several ETFs sold off into the close from their Friday highs, this sat at its intraday high just under the pivots and looks great if gaps higher on Monday.
XRT (Retail) This confirmed the warning phase-that’s not good
IYR (Real Estate) Possible reversal candle over the 200 DMA-like that
GLD Reversal candle Thursday, inside day Friday-I’d say classic indigestion.
OIH (Oil Services) Trying for another bottom maybe
XLE (Energy) Trying for another bottom maybe-only this is right at the 200 DMA
TAN (Guggenheim Solar Energy) Subscribers: Inside day on the 200 DMA so on Monday watch 42.36 R1 and we can add if clears it
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs confirmed back to a bullish phase
UUP (Dollar Bull) Rocket job over the monthly moving average
IFN (India Fund Inc.) Subscribers: Like this again now that it cleared the 10 DMA
FXI (China Large Cap Fund) Holding the July lows
SGG (Sugar) Subscribers: I can’t be too upset with all the times this looked like a bottom and failed, but check out that weekly candle!
JO (Coffee) Subscribers: Watch this if clears Friday’s highs
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:N/A
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:
X Inside day and only like with a miniswing risk if clears 42.00
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)
ANN Inside day and slightly negative pivots. Like that its holding the 10 DMA and will like better over 41.89
DUK Slightly negative pivots but a risk good to around 73.09 the 50 DMA. An open over 73.85-74.00 is good for an OR move
FB Inside day with the highs right there at 78.94 which makes this a good miniswing trade to catch quick momentum
SWKS Inside day with highs 59.25 for a miniswing trade if risk lines up
ABBV Inside day above the 10 DMA and if holds 58 see good miniswing trade to see if can clear recent highs
IGT If holds 16.80 look for an OR breakout over 16.95
Category 4:N/A
Phase Change:
SWI Unconfirmed bullish-higher lows since May with an inside day and on the 50 DMA for a good risk-if this closes out September over 43.40, first time clearing 23 month MA since 2013
LEN Inside day on the 200 DMA with good risk to Friday’s lows if clears 39.95
BXP Possible slingshot low and over the 200 DMA. Needs to confirm. Same pattern with MAC
SHO Like MAC and BXP-reversal but right under the 200 DMA
Shorts: On Focus List: CRM DIS KRFT (all are on the 50 DMA and could break if market is weak)
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
GOOG Confirmed the warning phase and looked heavy under Friday’s lows
XL We tried it for a daytrade, and now under the pivots if market is weak, would try for a miniswing
PSX Could still be good if cannot clear Friday’s highs
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
NFLX Looks like its flagging to more downside with good risk to 454.60 for swing short-worth a swing if breaks Friday low
Best Best wishes for your trading,
Michele Schneider
