I am writing this while AAPL digests the miss on earnings and NFLX digests the beat. So, what could that do to the market? A couple of caveats as we continue overbought on the near term Relative Strength Indicators-first, the Russell 2000 made a new high and closed on the lows. Second, NASDAQ at a very critical area here-with a gap above the 2013 high, making a new one-a failure could signal some sellers. And more importantly, make any new investors even more reticent than they have already been.
S&P 500 (SPY) Like so many instruments, this has a super high 2-day RSI. But, no type of blow off rally feel since volume is light. Subs: Tops are typically made 4 ways: Blow off rally with huge volume, slingshot patterns, Island tops or, 2 or more tops made at resistance areas. S1 important again
Russell 2000 (IWM) Closed down and could be a first fair warning sign Subs: Possible slingshot if confirms. The chandelier exits or the 10 DMA are great for any balances you are holding long.
Dow (DIA) Breakaway gap if holds but with high 2-day RSIs
NASDAQ 100 (QQQ) 67.34 was 2013 high which it cleared, but now becomes even more important as a pivotal point.
ETFs:
GLD I still maintain the best scenario overall is for GLD to retreat. But, until rates climb and any tensions around the world subside, the longs still ok with the 5O DMA the obvious resistance to clear.
XLF (Financials) Watch here since doji day-and new 2013 high by one tick.
IBB (Biotechnology) Getting heavy Subs: Good place to go for shorts
SMH (Semiconductors) Part of me thinks this should have done better with the CREE report and the other part of me thinks that it's just pausing before pushing on to 36.00
XRT (Retail) Overbought and another sector that made a new high for 2013 then retreated
IYT (Transportation) Even if this sells off from here, I still am quite satisfied with the profits we took
IYR (Real Estate) Overall looks great but if market sells off some, so will this
USO (US Oil Fund) Resistance at 35.00 and closed right there. If good, should clear. If not, still longer term trend is negative Subs: Yet another possible slingshot low in SCO-has to clear 38.05
OIH (Oil Services) Approaching overbought
XLE (Energy) 77.35 the 2012 high. Inside day.
TBT (Ultrashort Lehman 20+ Year Treasuries) Subs: Like to see this get over 64.65 now R1
DVY (Select Dividend Index) Inside day.
XOP (Oil and Gas Exploration) Inside day
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 earning dates on your positions. Nothing on list with a 2-day RSI over 92
Category 1: (Aloha) 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)
TCK DOJI day and has to hold today's low. Could see a test of recent highs and beyond
TSO Long and took ½ ATR now want to see it hold 43.25 and keep going to the recent highs
HOT Inside day-follow range break
MOS* Inside day and should hold today's low if good. If it clears 60.00 see move to 62.00 and beyond.
HFC Prefer a reversal, but cleared the 50 and 10 DMAs today
NWS Day to miniswing trade with a clearance of 28.05 taking this to new highs with a risk of 27.75
VHC Today's low should hold. Like reversal or breakout depending on risk
TRIP Like to see 45.45 clear for another leg up and 44.40 to hold
USG* Inside day-tomorrow is make it or break it depending on the range break.
IPG Over 12.04 looks good-small ATR so have to do as swing only
QIHU If holds 32.00 and clears 33.00 could see old highs 36.00
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:
AXP A shot over R1 with low RSI
OCN Reports 1/31. Low RSI and has to hold 36.69 clear 37.90 R1.
Phase Change CLH Through Friday's high 56.93 this is an add. Like to see 56.00 hold P Over 11.18 could see 12.00 AFL* confirmed phase change to bullish. Like to see 52.60 hold MJNA (a rare pick) .16 recent highs which if clears is a buy and hold. Inside day. UA Inside day after possible slingshot which means has to hold today's low and take out 48.02
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NVDA 12.19 max risk and possible move to 7.00
PANL Slingshot confirmed. 27.31 good risk with support at 25.00
FCX Inside day. Should not clear 35.23 and has to break today's low to see 33.00
LO Should not clear 39.52. Could see 38.00 and lower
NEM Should not clear 45.47 and could see new lows
Bye for Now!
