The week ended with digression. S&P 500, Russell 2000 and the Dow closed well proving time is just as valid as price correction. NASDAQ however, mainly thanks to AAPL, closed weak although to its benefit, managed to hold the January 2nd low (day everything gapped higher.) Assuming the January 2nd holds in NASDAQ, the market internals are positive. If QQQ break further, it seems logical to conclude that new longs in other indexes could sell out and new investors waiting to get in could remain sidelined. Monday's action should set the tone for the week. Also important is the start of earnings season.
S&P 500 (SPY) 147.16 is the high from 10/05, now resistance. January 2 low-144.73 key to hold Subs: Pivots positive
Russell 2000 (IWM) 86.96 the possible extinct 2012 high is pivotal and a good key to watch as the week begins, especially given the weakness in QQQ. 86.04 is the January 2nd low. Subs: Pivots Positive
Dow (DIA) Looks attracted to 135, a small gap from 10/18. Otherwise, 133.70 near-term pivotal area and 132.89 January 2nd low. Subs: Pivots Positive
NASDAQ 100 (QQQ) Took out January 2nd low by a tick and closed above making Friday low important level. Follow through to the downside will take this index down further maybe to around 65.66. Otherwise, will have to get above Thursday's high to see 71.00. Subs: after a marginal slingshot high at 67.34, defensive until that clears. Pivots negative
ETFs:
GLD 158.39 is the 12/20 low. 161.16 the 200 DMA Subs: Slingshot low held. RGLD also held the 200 DMA. Friday high and R1 line up
XLF (Financials)17.12-17.20 is the 2011 high which is 1st target from long position.
IBB (Biotechnology) Expectation is this will trade in line with market and not outperform like it did in 2012
SMH (Semiconductors) If ready to resume its run up, 32.99 should hold.
XRT (Retail) Still has to clear December resistance or vulnerable. Subs: 64.18 is the slingshot high from 12/19. Under Friday's low, looks for short opportunities in this group. Tradestation did not allow for a short in the ETF. See short picks
IYT (Transportation) 101 is the target.
IYR (Real Estate) 66.25 resistance. Then a gap to fill to 66.57 from September 19th.
USO (US Oil Fund) 33.95 -34.10 resistance to clear. Subs: If can't clear, could see move down to 33.10
XLE (Energy) Subs: a move to 75.20 is possible
TBT (Ultrashort Lehman 20+ Year Treasuries) A bit toppy now after a massive move higher. Subs: Slingshot high possible if breaks Friday low.
DVY 2012 highs 59.08 and although nearing short term overbought, looks like a good place for 2013
REE (Rare Element Reserve) Unconfirmed phase change to recovery. Subs: Long with stop under 3.48
XOP (Oil and Gas Exploration) Subs: 54.60 should hold now
XHB (Homebuilders) Inside day. Subs: Under 27.12 could see correction to 26.00 if market weakens
UUP (Dollar Bull) Confirmed recovery phase. Subs: 22.10 some resistance but staying long with 21.88 stop
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: Will eliminate anything with an RSI over 92.00. An asterisk * means it's a 2013 pick.
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:
VMC 52.75 max risk and over 54.30 could see 59 the 80 monthly moving average
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:
CREE* Over 35.12 clears recent resistance. 33.36 is the 80 monthly moving average
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)
COG 2 Inside days. Holding the 10 DMA now good risk 49.88. Improved in condition. Over 50.75 looks good to 52.50
SWK* Inside day. 75.20 is R1 with 73.70 the 10 DMA max support
ADBE 38.20 clears 3 year high. Friday's low good support
CNQR Over 70.00 clears resistance. 68.75 support. Could see 77.50.
FDX 2Inside days. Sideways action throughout 2012. Through 95.20 could be poised to see 100 and higher. Friday's low good risk.
DVA* Inside day. Like to see it clear Friday's high also the 50 DMA and hold Friday's low
EQT* 60.00 now good support. 63.50 next target.
AMZN Inside day. Should hold 254.50, now max risk. Could run to 2012 highs
LNKD* Inside day. Has to hold 111.40 and clear 113.90
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:
AFL* Held 50 DMA. 51.86 max risk. 52.78 R1 to clear
Phase Change: DLR* 2-day correction in recovery phase. Has to hold 68.24 clear 68.88. SLB* support 71.04. Like to see it eventually get through the 80 monthly at 72.10 INTC* Right at the 80 monthly moving average with 20.95 max risk. 21.56 has to clear KLIC 12.17 good risk. Through 12.50 good BYD 6.83 max risk with move over 7.05 could see 2012 high 9.75 TRIP Over 44.50 2012 high 47.81. Risk 43.40
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
WFM Still short ½ from 92.44 target 90.19
AVB Inside day. 136.92 good risk. 133.30 underlying support
JWN 54.35 S1 and 54.15 the 50 DMA-if fails, good place to go for short
DDS Slingshot high to start year. Under 79.82 looks weak and for now, 82.10 is resistance
TSCO Inside day. 92.39 max risk. 89.60 underlying support
FIO Landed near recent lows. Looking heavy but to control risk, look for an Opening Range High Failure against 22.50 but consider weakness as well
CMG Under Friday's low breaks S1 and could see drop to 285. Risk 303 area
Bye for Now!
