Party like the Dow is over 1299! I was a Commodities trader on the NY Commodities Exchanges for years. I never thought I would live to see a world where the US stock market swings 100 points plus per day like a hot future does. Some important lessons I learned while there: listen to nobody's "opinion", buy/sell the rumors, taking partial profits before the sobering news lets on and-do not be afraid to follow the signals. Even when they fail, eventually, if consistent, they work. And if you understand risk, the rewards will be so much more the sweeter!
S&P 500 (SPY) A significant accumulation day in volume-2 in a row ending last week. 138.99 is a gap fill from 5/03/12. Closed beneath it after filling it Friday afternoon-so much for summer doldrums! Wouldn't read too much into high RSis now. Rather see what happens at 139.00 and follow accordingly.
Russell 2000 (IWM) Startling hold of the 200 DMA. Resistance is first at 79.81, a gap yet to be filled, then all the way to 81.84 July 5th high. So although action was great, more to prove here.
Dow (DIA) After the island it left behind on Thursday, not to be undone, this too has a gap to fill to 131.50 also from 5/03.
NASDAQ 100 (QQQ) 65.25-65.31 last swing high to clear. Then, corresponding gap is to 66.18. In all 4 indexes, the phase is bullish meaning dips are presented as buy opportunities.
ETFs:
GLD a couple of days of a dip here and this will look like a fresh buy signal. Subs: 2.5 ATRs and counting although I expect some digestion so trailing the stop.
XLF (Financials) 14.85 last swing high. Nobody who reads this daily can say I have not been all over this group since 2012 began. Subs: Got ½ ATR today, now no loss stop
IBB (Biotechnology) A textbook bull run.
SMH (Semiconductors) Right up to the 200 DMA. Should be real interesting to see if the semis are at this party or not.
XRT (Retail) Subs: I see that nagging slingshot high from April 30th. I wouldn't fade this now, but in your journals, start with the heading, if market rolls over, go here for a short.
IYT (Transportation) Subs: gapped over 89.85 Friday for a classic phase change 5 minute opening range high. STUDY! 92.50 now gap resistance
IYR (Real Estate) 65.20 super important now-if holds good sign, if not, respect that.
USO (US Oil Fund) Could not fill the gap and underperformed the market. Subs: Keep eyes here for short opportunities under S1. (SCOultrashort)
XLE (Energy) Unconfirmed phase change to accumulation
TBT (Ultrashort Lehman 20+ Year Treasuries) Subs:14.60 new support to hold.
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: Phase is real and now you will learn about short-term trading patterns to find stocks that correct and how to see when/if they are ready for a continuation move. If not long, might require some patience as week starts as I am not including anything with an RSI over 92.00 for a new position.
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:
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:
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:
AMZN 233.84 was the high 2012 and 246.71 the high 2011. Would only take an OR reversal to control risk.
MOS has to clear 59.00 to keep going and hold 58.20
COG Underperformed, but if holds 41.25, could see a push to 2011 high 45.00 and beyond
PPG gapped after earnings. Has to clear 111.15 and hold 109.50. All-time high 114.62
MON Back to condition 1. Max risk 86.00 with all-time high 87.77.
FDX 91.45 point to clear and 90.25 point to hold
TWC Max risk 84.30 but also needs to show some muscle over 85.00 to tackle 86.30 all-time high and beyond
LEN Really want to see Friday high clear now. Risk 30.00. All time high 31.90
EBAY 45.48 all-time high which if clears should give this another push up. Risk now 44.85
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:
ARNA Inside and narrow range day. Not oversold, but 4 days under the FTP with a good level of support at 9.25 max risk. Ever since Kramer recommended it, it has gone straight down (amusing to me). But, if can get back over 9.60 has the 10 DMA at 9.95, then could recover back to 12.00
Phase Change: POT have to see 46.00 clear and 45.00 hold CRUS Now needs to clear 29.00 hold 27.85 HOG Back to unconfirmed warning phase. Should hold 44.25 and clear 45.00
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AAP 70.31 is R1. Support 68.50
CVE Inside day. Cannot clear Friday high and should break Friday low
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
MCD cannot clear 89.70 and should break 88.65
JCP 23.37 max risk and now has to break 22.23
Bye for now!