Marketgauge has a new proprietary software tool that gauges the market tone. We are using that as a layer in addition to the market internal indicator or McClellan Oscillator. The McClellan showed a neutral short term bias while our market tone indicator read “short-term negative (looks out 2 days in advance) and longer term bullish.
Add that to the comments I have been rewriting all week concerning the extension of ranges set from last week and following them accordingly until we hit the end of the week. At that point, whetherFriday’s data reverses or extends the week’s trend, we see that as the next direction for at least the intermediate term.
The TLTs confirmed an island top with support all the way down to 115. Friday’s action should elucidate the next direction that rates will move in as well, especially on the heels of the jobs report and the aftermath of Draghi slashing rates.
Here’s a head scratcher: The Wall Street Journal on September 3rd, 1929, 85 years ago and at the market peak read,
“Public Demand for Stocks Appears Insatiable”
S&P 500 (SPY) 199.39 last week’s low is support level. 200 could hold up as well. Tomorrow range break should be key Subscribers:Negative Pivots in all
Russell 2000 (IWM) 115.51 last week’s low. Interim support at 116 and back over 117.50 game changer
Dow (DIA) Best shape and more sideways looking at this point
Nasdaq (QQQ) Looks like its confirming that reversal from the highs but it did hold last week’s low at 99.09-key
XLF (Financials) Doji day and still hanging tough-of course this will like firmer rates I gather
KRE (Regional Banks) Needs to do more work-if holds the 50 DMA much better and still needs to clear the 200 DMA
SMH (Semiconductors) Do I see 3 shooting stars? If so, low of 51.49 if fails spells trouble but over 52.26 really good
IYT (Transportation) Different market here-very strong for now
IBB (Biotechnology) Support 268.60 to hold
XRT (Retail) Managed a new high, closed green-one to keep watching and again, supports my theory that certain retail stores will prosper with higher rates
IYR (Real Estate) Should not fare well if rates firm
ITB (US Home Construction) Left the gap in tact from mid August so if can hold up, has to clear 24.00 again
GLD Did not confirm the brick wall and looks heavy again
Metals and Mining (XME) Another down move after the bearish engulfing day and on the daily chart major support at 42.45
USO (US Oil Fund) It’s all about two areas-34.50 and 36.20-in between noise
OIH (Oil Services) Ugly with the British Petroleum news
TAN (Guggenheim Solar Energy) Made new 2014 highs but closed beneath them-still has amazing potential
TBT (Ultrashort Lehman 20+ Year Treasuries) 55.60 is now key support for the TBTs and TLTs have to break 115 to see more upside in the ultrashort
UUP (Dollar Bull) New 2-year high-not surprising
EEM (Emerging Markets) Subscribers: Want to see what happens at around 45.20
IFN (India Fund Inc.) New highs
EWP (Spain) Subscribers: Held the 50 DMA-will watch carefully for a possible swing entry
EWW (Mexico) Subscribers: New 2014 highs
BAL (Cotton) Subscribers: Once it clears the 50 DMA we might have something to sink our teeth into
JO (Coffee) Subscribers: If holds 37.25 looks bullish for the longer term
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:
FB If holds 75.00 would consider a reentry for a miniswing trade over 76.74
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)
M Now has to clear 63.10 and hold 62.40 area
CCI When I see instruments make a new high and fall with the market to close lower, I prefer then to buy ORRs to control risk. 79.60 is key support now
NKE Of course I prefer an ORR on this too but it does look poised to move higher from here
SCCO Still in the game if can clear 33.04 and hold 32.30 for a swing
KSS Looking for an ORR to add to our existing position
PG Good day here and close to new highs-also looking for an ORR to add the other 1/2
Category 4: N/A
Phase Change:
*PNC 84.70 is key support to hold as it still looks good over the 50 DMA-star
WMT Cleared the 200 for an unconfirmed phase change to Accumulation-watch this for a day to miniswing
AMZN Got an upgrade today. Over 348 on a strong open, clears the 200 DMA with a good risk to today’s low
WFM Seems to be basing if holds 38.75-look for an entry using OR rules
GE Since this is over the 80 monthly after years, and it closed green today I am putting this back on list if clears 26.13 for a swing
*MRVL Good day here and now, a fave for tomorrow if holds 13.75
Shorts: Focus list picks: APA MON KORS BHI
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
ANF Unconfirmed phase change to warning-good risk to 41.78-also if breaks under 40.42 looks like it can head down again to recent lows
SINA Inside day. Like under yesterday’s lows for a day to miniswing trade
Category 6:N/A
Bye for now!
