SPY closed down .7% of the Distribution day in volume, the first since June 23. If filled the gap that was left from Thursday and closed above 134.10 which was the high that was made for three days before the gap higher from last Wednesday. Now, a move back above 134.88, especially on a closing basis should resume the move up. A break and close below 134.10, and we could see a further correction at least down to the 50 day moving average 131.93. The slope on the 50 day moving average declined slightly indicating that although we are still in a bullish phase, Friday's activity took some of the strength away.
QQQ closed down .3%, and also filled the gap left from last Thursday. The slope on that 50 day moving average is neutral. It also had a distribution day in volume.
IWM filled the gap, held the adaptive moving average at 84.11 and also had a slight decline in the 50 day moving average.
Eminis-held key support at 1330 then took out the intraday consolidation at 1338, closing above. An open and hold above 1338 and next resistance at the 1352 area.
Looking ahead, the volume patterns and the decline of the 50 day moving average's slope suggests that more correction is necessary. The phase is definitely bullish. QQQ has been leading because of the movement of the major stocks such as NFLX, AMZN, AAPL. A lot of the overbought condition has been alleviated with Friday's decline. Now, I would either like to see a bit more of a correction closer to the key moving averages or a bit more sideways action at these levels to establish a new base of support before reentering any already extended stocks or ETF's for anything more than a day or mini swing trade.
Featured ETFS:
SMH could not confirm into a bullish phase which is the reason why I take note of not only the price action relative to the 50 day moving average, but also its slope which had declined last Thursday and Friday. Therefore, will now wait to see if it continues to hold last Friday's low at 34.28, can get back through the 50 day moving average at 34.74, and for the slope to at the very least neutralize before reentry.
SLV closed right on the 50 day moving average which is still sharply declining. However, with this recent rally, it is holding the 70 exponential moving average. Now, if last Thursday and Friday's low around 35.26 holds, and it can get some volume through the 50 day moving average, still has overhead resistance at 37.90 area, but through there, the last two month's price action will look like a base which could easily give it enough momentum to get through all time high and possibly onto new highs.
UUP appears to be basing, but still needs to clear 21.50 on a closing basis and more importantly 21.68. 21.19 is the key area to hold. Looking at the Euro, has been holding 1.42. Also has big resistance at 1.45. For now, it is range bound and waiting to see which way the range breaks for the next direction.
XLF gapped lower after failing to get above the 200 day moving average. Now, there is underlying support at the 10 day moving average 15.29 down to 15.20. Will continue to watch the financials carefully as a key component to the next overall move in the market.
XRT still looks very strong as it continues to hold the gap that was made last Thursday provided it continues to hold above 54.75. It also worked off some of its overbought condition.
IBB after getting within two tics of the all time high last Thursday, held last Thursday's low at 108.49 and closed basically unchanged. On the daily chart it is overbought but not on the weekly. 110.02 is the old high.
IYR which did take out the old high last Thursday, sold off with the rest of the market on Friday, working off some of its overbought condition. XRT and IYR have negative pivots. 55.69 is the area to hold in XRT and 62.48 the area in IYR. Otherwise look for further correction before considering new entries.
IBB has slightly positive pivots. Over the all time high, can buy in anticipation of its continuing higher; to control risk, use 109.32 the FTP.
Picks: New subscribers please note that if I **a pick it means that if the setup on the open matches the parameters that I write about, I will primarily focus on those stocks and ETF's. Similarly, Day to Swing means that if the stock or ETF sets up according to the parameters I write about, it is one that you can either daytrade , mini swing or hold onto for a swing trade which typically means a week to a month or longer. Those of you who are only able to watch the open, and prefer to swing trade can use the list by setting up on your trading platform the ones that are both **and recommended for swing trades. Also, I suggest you sign up to follow me on the private twitter as I am happy to answer questions on any particular stocks or ETF's you might be interested in swing trading but are unclear as to whether or not they are set up appropriately. Finally, do not be afraid trade more expensive stocks. As long as the risk is clear, the percentage of profit is much higher. Often times, people perceive cheaper stocks as safer trades. Usually, cheaper stocks are cheap because they do not have substantial upside potential. If you do not have the equity in your account to cover the margins on more expensive stocks, you might consider looking at options as I give targets and risk points as a way for you to price in and out of the money calls and puts.
Longs: Keeping half of the positions in some of the deep in the money swing trades from the last couple of weeks in AAPL (earnings July 19th) , AMZN (earnings July 18th) , WYNN (earnings July 25th) turned out to be prudent as they all closed up. Likewise, bailing out of the weaker longs also turned out to be prudent. For consistency, the recommendations either have solid short-term trading patterns or held key moving averages and are not overbought or oversold. Unless a Condition 1 Nugget has two days under the floor trader pivot or an inside day, if the pivots are negative for Monday, I have not included them on the list. Given the recent volatility, my intention is to provide the highest probability trades for those looking to mini swing trade. Certainly, there are many daytrading opportunities but I prefer to tweet about them as I see them. Otherwise, have patience and wait for the setups that have the highest probability with the lowest amount of risk for the longer-term trades. Please keep track of earnings on any stock you are in. We NEVER keep a trade into earnings.
NETL** has four days under the floor trader pivot yet closed above the 10 day moving average at 40.18. I bought half a position because of the close above the 10 day, and will look to add over the FTP which comes in at 40.17 exactly where the 10 day moving average is. If it comes in higher, the FTP and the 10 day moving average is a good risk point if paying up for a mini or day trade. Swing traders will have to use the low from Friday. On the daily chart, there is a flag forming which breaks out above 40.80. Overhead resistance near all-time high made at 43.70. Above that and it could continue to 55. Day to swing.
VHC is approaching overbought, but is on the list because of the bullish engulfing pattern and the positive stack of the pivots. To control risk either buy on an opening range reversal or a hold of 37.49 the FTP. Otherwise, would be reluctant to buy strength for anything other than a day trade. Day to mini.
ISRG*after rocketing early last week, sold off and now has two days under the floor trader pivot. The FTP comes in at 366.67 and I would not risk more than to under Friday's low 362.32. Has to get back above the 10 day moving average at 368.81 to stay long. The high last week was 384.49. The all-time high was made in April at 393.92. The weekly chart looks like a possible inverted head and shoulders. If that is the case, projected move could be another 100 higher. Earnings July 19th. Day to mini.
YUM* last Friday after making new all time highs, sold off and had three days under the floor trader pivot. Did close above the FTP and the 10 day moving average at 55.48 with an inside day. Now, if it can get above 55.85 where R1 is, can use a tight risk to the FTP at 55.36 which lines up right under the 10 day moving average. Since the pivots are negative, prefer to buy this on strength than weakness. The high so far is 57.04. Above that and we could see another $4-$5 on the upside. Earnings July 13th. Day to mini.
ACOM**those who have been with me for a while remember when we caught this for a perfect mini swing trade back in May. Now, has a bullish engulfing pattern on Friday after holding the 10 day moving average at 41.26. The pivots are positive and the FTP is at 41.96. Ideally since this is a thin stock, would like to buy this on an opening range reversal. However, on the 30 minute chart a move above 42.55 and we take out eight days of consolidation and with a close above there, becomes the highest closing price since May 9. All-time high was made in April at 45.79. Could see a move to 55. Earnings July 25th. Day to swing.
KLAC**has two closes above the 50 day moving average with an inside day on Friday and positive pivots for Monday. If it holds 41.50, the 50 day moving average and the risk, and opens above the FTP at 42.10, above Friday's hi 42.43, needs to clear 43.43, but once it does, could make a move back up to 48 and possibly beyond. Earnings July 28th. Day to swing
BIIB I had originally recommended this when it was trading at 94. Now, after three days under the floor trader pivot, Friday closed just above and held the 10 day moving average at 107.08. The FTP is negative and comes in at 106.93. If it comes in above the FTP, have a tight risk to Friday's low 105.82 but must close above that 10 day moving average and ideally clear R1 at 108.04. 109.63 is the high from June 29. The weekly chart shows the possibility of a move to 115. Earnings July 26th. Day to mini.
Shorts: I don not see any really great shorts to recommend which is probably a good sign for the overall market.
FXI Has to break 200 weekly moving average at 41.97.
Have a great Sunday!