First, I would like to thank Geoff Bysshe for filling in for me during my break and doing so with such aplomb!
Second, I would like to thank the Interest Rate Ultrashort TBTs for presenting itself upon my return with a potential island bottom, (TLT’s in reflection, an island top.) Typically a second day confirmation is required. The US Dollar ETF had one in early May and never looked back. If such is the case with the rates, we can go back once again, and look at the potential winners and losers of the fallout of firmer rates.
As for the overall market, with all indices back in bullish phases and NASDAQcontinuing its status as the Jewel of the Nile, so to speak, unless the lows of last week are taken out, a bullish bias remains.
For the weekend update Geoff wrote, “Look to follow the direction on Wednesday that takes place relative to what happens Tuesday, especially if that range extends outside the range of last week. Then take note of whether Friday’s data reverses or extends the week’s trend.” Sage advice.
Add a real serious focus on the next interest rate direction to that advice, and September’s stage should be well set.
S&P 500 (SPY) 199.39 last weeks low should market reverse. Otherwise, decent digestion day to start week. Subscribers: Positive Pivots in all except DIA
Russell 2000 (IWM) 115.51 last weeks low. Over 117.70 looks really good
Dow (DIA) 171.35 recent high as this needs to clear that level once and for all or if breaks 170.10 selling should come in
Nasdaq (QQQ) Another new high with all the strength in Facebook, Apple and Twitter
XLF (Financials) New high close. 24.35 is not out of the question
KRE (Regional Banks) Almost made it over the 200 DMA, but not quite. Did however, have an unconfirmed phase improvement to recovery
SMH (Semiconductors) Sharply unchanged which is interesting considering it’s on the highs
IYT (Transportation) New high close
XRT (Retail) A second day pause and a doji day-making this very lookable tomorrow Subscribers: A move over 88.73 looks good for new highs and move to 94 possible
IYR (Real Estate) Good consolidation above the fast moving average
ITB (US Home Construction) Holding the 200 DMA which is a good sign Subscribers: A tight 8 day range on the 200 DMA. 23.75 is the key low level to hold. 24.20 and 24.30 are the levels to break to move up.
GLD Before I left, I was one of the few bears out there based on long term charts-although no position, today was a confirmation and sad day for bulls
Metals and Mining (XME) Ugly bearish engulfing day but no real harm done yet on the daily chart with major support at 42.45
USO (US Oil Fund) Looking pretty awful right now, especially under 34.50
XOP (Oil and Gas Exploration) Back under the 50 DMA and has to hold around 77.12 now
FCG (First Trust ISE Reserve NatGas) Subscribers: Back to unconfirmed Distribution Phase
TAN (Guggenheim Solar Energy) Subscribers: Overall friendly with good consolidation risk to 42.25 if clears 43.60
TBT (Ultrashort Lehman 20+ Year Treasuries) TLT-Island top if confirms a second day-perhaps this time it is real-especially since island formations are super powerful
UUP (Dollar Bull) Spectacular and another one I have been bullish on for quite some time
EEM (Emerging Markets) Subscribers: Last month it closed on new 3 year highs at 45.06-watching to see if that can clear again which could be very bullish
FXI (China Large Cap Fund) Subscribers: Over 41.00 looks great especially if holds 40.30
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:
CCI 3 days of correction with a miniswing risk to under the 10 DMA and S1 if clears 79.84
Category 2: 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)
RHT Over 61.50 looks good for a miniswing risk to today’s low
HCA good if breaks out over todays highs possible to see new highs for a miniswing trade
KSS Inside day and based on chart, a good miniswing risk to Fridays lows and if this can clear 60, takes out 7 years of work on monthly chart
MFC After 2 days under pivots, today has positive pivots and a great risk against todays low on the 50 DMA. Has to clear 20.32-also new over the 80 monthly moving average-swing
PG Sloppy day so we cut the risk in ½. However, if holds around 82.00 can still see a move up over 83.15 which looks a lot better
Category 4: N/A
Phase Change:
PM Confirmed phase change to bullish with great risk now to the 50
DMA under 85.00. Like over 85.90 R1 for swing
PNC Unconfirmed phase change to bullish which means 84.50 has to hold and over 85.27 good confirmation-good for swing
WMT Today’s low max risk if clears 76.03 for swing in anticipation of a move over the 200 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BHP Miniswing trade risk around 68.52 with support around 67.50
SINA 46.82 max resistance and under 45 looks like it could see 35 at some point-mini to swing
FTI Unconfirmed warning phase with resistance around 61 and support t0 break 59.50 area
Category 6: N/A
Bye for now!
