In your face market correction! Only, I sort of wish the rally was not quite as robust as it was %age wise given the lack of volume that accompanied it (or didn't accompany it so to speak). Be that as it may, S&P 500 came back to nearly the high from July 10th at 136.23, which now becomes the next resistance level.SPY also made the biggest gain compared to NASDAQ, Russell 2000 and the DJ Industrial Averages. Perhaps you recall the video from Thursday night which featured SPY as the "go to" should the market rally with the added note to be wary of the 2-DAY RSI indication of oversold it ended Thursday's session with. Furthermore, I featured XLF, the ETF for the financial sector as the potential long term play above 14.50. That gained 2.8% on Friday with excellent volume.
Subs: Index pivots are stacked positive which means we look for S1 as first area of support and point of risk.
S&P 500 (SPY)135.50 now the fast moving average and closest support. 136.23 the high from 7/10 to clear before we are talking about a return to recent high 137.51. And, since back in an unconfirmed bullish phase, 133.60 the 50 DMA, key support. An accumulation in volume is needed for long term sustainability.Subs: We bought on the 5 minute opening range breakout over R1, and took the 1.5ATRs in one day-An excellent study of the low risk target 1,2 and option for waiting for target 3 formula.
Russell 2000 (IWM)80.00 is its next hurdle which then clears the fast moving average. 79.00, first area of support to hold. An accumulation in volume is needed for long term sustainability.
Dow (DIA) 128.14 the July 10th high to clear. Back in an unconfirmed bull phase provided it continues to hold 126.10. An accumulation in volume is needed for long term sustainability.
NASDAQ 100 (QQQ) Back in an unconfirmed bull phase clearing the 50 DMA at 63.06, yet running out of steam just under the 70 EMA at 63.48. The 10 DMA overhead at 63.86 is next resistance. Some earnings coming out that will be important, but not for another week. That suggests that this will be more of a follower then a leader until those reports shed more light. An accumulation in volume is needed for long term sustainability.
ETFs:
GLD Meager rally in comparison with market which again, no surprise here since producer price index confirmed what we see in the charts-low inflation number for now-continue to look to sell rallies. Subs: 154.50 a good resistance area to short against should it break Friday low
XLF (Financials) Ran right up to the trendline I featured in Thursday night's video. Subs: Hope you bought around 14.50. This did have an accumulation in volume. Now, 14.55 level should hold and would be welcomed as a buy opportunity for those not long. This is in anticipation it will blow through the trendline and continue higher.
IBB (Biotechnology) Friday high some resistance at the fast moving average
SMH (Semiconductors)Thursdays video pointed out that this held the last swing low from June 4th. Perhaps this can run back to 31.00, but if it falters from there, might be a place to short depending upon the rest of the market.
XRT (Retail) 58.65 the 50 DMA support, which like to see hold with a break of 59.50 a point to watch for more upside.
IYR (Real Estate)New high close-real estate never went red during last week's correction. Pay attention to signs like these.
USO (US Oil Fund) 32.95 the 50 DMA and moment of truth as to whether this is a great short opportunity. Subs: Would have to break Friday's low
OIH (Oil Services)Unconfirmed recovery phase which will confirm provided Friday's low holds up.
XLE (Energy) 66.86 is a gap fill area from July 5th. If clears that this recovery phase could be real, otherwise, if market rolls over, this remains vulnerable.
TBT (Ultrashort Lehman 20+ Year Treasuries) Held 14.70. Low volume and low percentage gainer, which suggests market psychology has not yet switched to a bullish bias even with Friday' rally. A major clue to next direction. Subs:Over 15.00 and will be looking at a possible low risk trade long.
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: Going to tighten up the number of new picks as the week begins to preserve focus as there are lots of opportunities in Category 3 now-please ask if you like something not on the list. Also note that the list becomes unmanageable if I include every trade's targets like TSLA for instance (assuming many of you are long different picks from last week)-please keep track of your own trades and the target areas, and set limits and trailing stops accordingly. Of course, ask me if unclear.
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: N/A
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: 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:
BUD 76.52 the gap low from 6/29 still holding and max risk. A dip to 77.10 holds the positive pivots and a good place to look for a long.
CIE Good one if energy firms provided 24.00 holds. Also like to see 24.67 clear to stick.
DNKN Should hold 34.25 and clear 34.85. Could see move to 37.00.
EWW I don't usually put ETFs here, but this looks good over 62.15 with risk to Friday low. Over 65.00 and in uncharted territory.
FDX Friday was the re entry time but, over 92.57 breaks out of a base from the spring and could see recent highs97.19 or higher. Should now hold91.50 level.
MON Over 84.00 could see another move to next resistance 87.00-95.00. Risk is 83.50 or where those 3 tops were last week.
SNI Unconfirmed bull phase and condition 4. Should not break 53.95. 54.80 is the 50 DMA to clear then 55.46 the 10 DMA. 57.75 is the all-time high.
VECO If semiconductors get going, this has a risk to 34.00 and should the 50 DMA at 34.40 then clear 35.25 the 10 DMA. Reports July 30th.
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: N/A
Phase Change: JWN Changed to accumulation-really should clear 51.90 and hold 50.85. Pivots positive.WPRT 33.35 the 200 DMA to hold. Positive Pivots. Room to 37.00 if market stays firm. F 9.05 is the low for 2011 with 9.12 this year's low. As it might have made a possible slingshot with a tight risk, worth watching.
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
APA Moved up with market but underperformed. Cannot clear 84.11 and should fail Friday low.
SLW Cannot clear 26.16 and should break 25.67. Support at 25 then 22.50
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
Advanced traders only: AAPLstill working a slingshot pattern and underperformed the market. Only if it breaks S1 601 would I consider a short against 604.25 the FTP.
AAP Back on list since closed near the lows. Positive pivots so cannot clear 71.82 and should fail 71.13 S1.
CXO 3 days up but cannot clear 85.00 the 10 DMA and should break S1 82.97
PXP A bolder pick because in an accumulation phase. But, made a new high and close on the lows underperforming the market. With positive pivots, should not cross 39.25 and break S1 38.36. Support at 37.00 the 200 DMA
Bye for now!