You can't keep a good market down! Some decent volume came in on Friday, partly because of options expiration and partly because the rally is starting to feel real, even to the doubters. Now, for those who subscribe to Murphy's Law, the masses talking up the market can be worrisome indeed; but, for the most part, a trend is one to be followed not faded. However, one must also note the risk on buying extended instruments and adjust expectations accordingly.
S&P 500 (SPY) Those lines in the sand like S and AR points merit respect. Friday, SPY touched S1, then ran to R1. Overall, we cleared 2012 high now making 148.11 the new pivotal area Subs: Pivots Positive
Russell 2000 (IWM) The power of the small caps indeed. Perhaps resistance overhead by the Bollinger bands. 86.80 is its line in the sand support Subs: Pivots Positive
Dow (DIA) 136.48 the 2012 high here. Inside day. IBM reports after the close on Tuesday-will be noteworthy. Subs: Pivots Positive
NASDAQ 100 (QQQ) 70.58 is the 2012 high-not even a factor yet. 67.34 was 2013 high which it cleared Thursday but then closed out the week below. I would tend to notch that up to AAPL, GOOG-both of which report this week. Until that dust settles, hard to predict. Subs: Pivots Negative
ETFs:
GLD Touched the 50 DMA and retreated then ended the week with an inside day. Subs: I still prefer to see this drop-now below S1 for overall health of the stock market in the long run-the new paradigm.
XLF (Financials) Ended the week holding the fast moving average with 17.20 the 2011 high and 20 the ultimate target. Now that many banks have reported, would like to see this find new ground from here
IBB (Biotechnology) A bit toppy now Subs: I would consider a short here for a move to 140 if cannot clear 145.50
SMH (Semiconductors) Bullish phase. Cleared 34.00 which held with an inside day. 2012 high 36.17 Subs: 33.90 a good place to hold now
XRT (Retail) Made new highs on Friday. If cannot hold, a move to 64.00 would be a healthy correction. Overbought.
IYT (Transportation) 101.60 the 2011 high. Friday high 101.49. I am happy to see my first big target met and wouldn't mind some correction from here
IYR (Real Estate) Not as excited about this group as I was in 2012. The high from 2012 68.26, quite a distance from here.
USO (US Oil Fund) Resistance at 35.00 and if good, should clear. If not, still longer term trend is negative
OIH (Oil Services) Trend change last week to bullish. Subs: After big run Friday, would look for a dip
XLE (Energy) 77.35 the 2012 high. Like to see some digestion since overbought now on daily RSI. Subs: took a bit of profit.
TBT (Ultrashort Lehman 20+ Year Treasuries) Subs: Let's see if it can get back over 65.00
DVY (Select Dividend Index) Rallied over a 2-year base
XOP (Oil and Gas Exploration) Looking for 60.00. Subs: Dip to 56.20 should like a buy opportunity
UUP (Dollar Bull) Tested the 50 DMA and retreated
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: Lots of extended stocks-note the earnings dates on your positions
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:
ACN Needs to get back over 70.40, and hold 69.70
Category 2: (Pipeline) 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)
A Inside day. 43.30 support to hold.
FLO Inside day. Has to hold Friday low and clear 27.25. Then, in uncharted territory
ESV* Improved in condition. 61.38 the 10 DMA to hold. R1 62.24 a good point to clear
AMZN Reports 1/29. 274.50 is point to clear for another push into earnings.
TCK Improved in condition. Friday low max risk. Like to see 37.62 clear
KORS Has to clear 55.15 and hold 53.00
NTGR* A close over 40.00 should take this up to 2012 high 43.44 next. Has to hold 39.35
MOS* Should 59.00 hold, next time it clears 60.00 see move to 62.00 and beyond.
USG* Tried for the 30.00 resistance. After that, 35.00 next clear area. Has to hold 29.20
QIHU 30.00 looks like the new base support with 31.57 closer support and clearing 33.13 the goal
ARG (day to mini only) Reports 1/24 Before open. If holds Friday low, could see a run ahead of the earnings
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
BZH 17.41 has to clear to get this going
Phase Change PM Now has to clear 90.00 CLH confirmed phase change to recovery. Inside day. Through Friday's high is an add
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NVDA 12.27 max risk with support 11.47 and possible move to 7.00
ESRX Inside day. Like to see it break Friday lows
Bye for Now!
