Week begins with a low volume snooze fest, but I am happy about that. Why? Because it makes the correction in a bull phase scenario more likely and gives traders plenty of time to look for confirmation. Plus, NASDAQ had an inside day which means price confirmation depending upon which way the range of the day breaks on Tuesday.
Subs: Pivots on indexes negative-watching R1
S&P 500 (SPY)Held the fast moving average and closed above Friday's low-2 important support areas. Downside support 134, through 135.70 looks better
Russell 2000 (IWM)79.10 the fast moving average support below and through 80.57 relief
Dow (DIA) After testing the 50 DMA, closed above Friday low. Weakest looking but not a complete disaster
NASDAQ 100 (QQQ) Friday's low 64.12 relevant and today's high also relevant. Subs:Especially since today's high lines up with R1. On downside, 63.30 next support if breaks
ETFs:
GLD Closed above 154 but very lackluster. Also confirmed back into a bearish phase
XLF (Financials) Looks heavier for sure, but if can firm above 14.52 that will be encouraging
IBB (Biotechnology) second inside day in 3 days. Subs: Positive Pivots
SMH (Semiconductors) Question now is will this be a third low higher than the last 2 swing lows? Only if it holds over 30.50
XRT (Retail) Has room to 58.90 and could get there as the candle is a bearish engulfing pattern
IYT (Transportation) Good sideways action for now Subs: new stop under 92.00
IYR (Real Estate)Good action continues Subs: Positive pivots
OIH (Oil Services) Over 36.50 looks interesting
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: Lots of Condition 1 and 2 stocks correcting. Have to limit the picks. If market is firm, go to category 1,2 or 4. If weaker, category 3. Choose 1-2 stocks and focus on those-if they set up, trade them and if not, don't. The other picks are good if market firms.
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:
BUD Never got the opening range breakout but did close over the pivots which are still negatively stacked. Provided it holds 77.50, once clears R1 78.08 looks good
HFC Like when I see a condition 1 stock with 3 days under pivots but outperformed the market. 36.05 good risk, has to clear 36.74 R1
DTV 48.46 the 10 DMA max risk. Narrow range day. Must also clear today's high
FDX Has to hold 90.60 and clear 91.20 then today's high
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:
HCA Reports 7/30. If it holds 28.15 the floor trader pivot and can clear today's highs, looks a whole lot better
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:
HD Reports 8/14. Some bought today on the opening range reversal. Now, like to see 51.80 hold and clear today's highs
CYH Reports 7/26. Closed above Friday's high. Swing longs can begin to look for target 2. New longs, target 1 and if you want to buy, over today's high is good confirmation
EQR Really has to clear 63.50 for a leg up ahead of earnings 7/25 and hold 63.05. Long a 63.40 starter position
EW Reports July 24th. Sideways on the 10 DMA-102.30 max risk and over R1 103.82 could see a continuation before earnings
ARNA Inside day. Has to hold today's low. Overbought on weekly but not daily chart.
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 1-4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
EXPE Inside day. Has to hold today's low and clear 47.45 then today's high Reports 7/26
Phase Change, Positive Pivots:RRC Reports 7/25 Inside day and unconfirmed recovery phase. 62.50 the overhead 200 DMA AXP Reports 7/18. 57.87 the 10 DMA and max risk and should clear 58.67 R1 CB Holding the 50 DMA so if holds 72, clears R1 72.46 could see move up ahead of 7/26 earningsDKS 49.15 should hold and clear R1 49.73 EBAYInside day. Has to clear today's high
Shorts: Typically, I do not list those that have any RSI under 15.00
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
GDX Cannot clear 44.75
NKE Cannot clear 91.32
CRZO Neutral pivots-cannot clear todays high
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day's lows N/A
Bye for now!