S&P 500 remains in correction mode holding the January 2nd low at this point. Somewhat of a distribution day in volume although overall, volume is under the average daily. NASDAQ although down, performed better. The gap up from January 2nd remains intact. The Russell 2000 or small caps closed green. The market tone was set Monday as was expected; however, given today's action, no real harm has been done and either IWM or QQQ can lead us back up if either clears the highs of the last 2 days.
S&P 500 (SPY) Over 146 will look a lot better. January 2 low-144.73 key to hold Subs: Pivots negative-look for a move over R1
Russell 2000 (IWM) 86.96 the 2012 high remains pivotal and for the drama of it all, the closing price again was 86.94-so close. 86.04 is the January 2nd low. Over today' high will feel better Subs: Pivots Negative with today's high and R1 lining up
Dow (DIA) Broke 132.89 January 2nd low but closed above Subs: Pivots Negative-also R1 lines up with today's high
NASDAQ 100 (QQQ) Tested January 2nd low once again and closed above it once again. Now, has to get above 66.85. Subs: R1 is important and 67.24 last week's high even more important
ETFs:
GLD After an Inside day, opened higher and pushed against the 200 DMA Subs: RGLD long today on opening range breakout.
XLF (Financials) Thought today's action was very healthy. Back over 17.02 should resume move up.
IBB (Biotechnology) Impressive move outperforming the market and now a bit overbought
SMH (Semiconductors) Now, will look to be a buyer at 32.60 area
XRT (Retail) Began the weak negative in this sector, but now it approaches support at 62.30-40
IYT (Transportation) Not expecting much more of a correction here. Subs: Over R1 98.42 should get it to 101.
IYR (Real Estate) 66.25 resistance.
USO (US Oil Fund) 33.95 -34.10 resistance to clear. Subs: If can't clear, could see move down to 33.10
OIH (Oil Services) Subs: If cannot clear 40.32 might still be a decent short
XLE (Energy) Good correction into support. Subs: 73.18 is R1
TBT (Ultrashort Lehman 20+ Year Treasuries) Love to see a dip to 65.12 but would not be afraid to buy renewed strength from here
DVY (Select Dividend Index) 58.10 now support to hold. Subs: R1 and today's high line up.
REE (Rare Element Reserve) Looking to see if this can clear 4.00 Subs: Stop tomorrow 3.49
XOP (Oil and Gas Exploration) Subs: Looking to add over 56.00
XHB (Homebuilders) 27.62 resistance to clear
UUP (Dollar Bull) Inside day. 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: More focus is on the beta or indexes as the next place to take positions as many stocks are extended.
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 Like over 53.90 then R1 if can hold 52.95
APH 65.81 the 10 DMA max risk. R1 67.11 to clear
MUR* Reports 1/30. If holds today's low, could see move over 60.28 R1 and beyond
USG* 20.27 max risk. R1 and today's high line up.
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)
SWK* If market cooperates and this holds 75.00, could be ready to see 81.50
ADBE 37.75 now max risk. A close over 38.20 clears 3 year high.
CNQR Now like to see 69.80 hold. Could see 77.50.
FDX Another one ready to go if the market firms. Max risk 94.90
AFL* Long today and now has to hold 52.00 to see 2011 high 55.00 and beyond
WHR*Over R1 105.95 should rally with max risk 104.60 for mini and 103.15 for swing
BEN Looking now for an opening range reversal to control risk against 131.00
GOOG Can use 730 as max risk if can clear today's high. Earnings 1/22
CRM Good risk to 168.25 depending upon how it sets up.
Category 4: (Rip Tide)N/A
Phase Change: SLB* beginning to clear the 80 monthly moving average so has to hold now around 72.00 POT* Unconfirmed phase change to accumulation if holds the 200 DMA or around 41.78 RHT pushing up to the 200 DMA 54.54 which if holds 55.42 some resistance, then clear DVA* inside day with move over 109.79 taking it to test the 50 DMA. If that clears, 112.50 possible. Support and risk 109.00. CA Today's low max risk. Like over R1 22.95 BEAM* Like over R1. Reports 02/01. BRE Reports -02/04 Like if holds today's low and can clear 51.25.GG Slingshot low if confirms over today's high with the 10 DMA good risk
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CNX Confirmed phase change to distribution if stays below the 200 DMA 31.85
BHI Like to see it break the 50 DMA otherwise, max risk 42.62 R1
ESRX Broke down today. Now, 54.51 good risk
RRC If cannot clear today's high, could see it break the 200 DMA
Bye for Now!
