Today, SPY had the Accumulation day in volume with a big gap higher closing up 1%. The buzz was that a lot of today's rally was in anticipation of a good unemployment number in the morning. Regardless, just looking at the technical picture, SPY continues to be overbought on a daily stochastic not on a weekly one and the volume/price patterns continue to make a strong case for higher levels.
QQQ closed up 1.4% with its six accumulation day in volume over the last two weeks. It took out the last swing high made on May 2 at 59.34 on an intraday basis, closing just below.
IWM also had its sixth day of accumulation in volume but has a bit to go to the high made on May 2 at 86.82.
Back in mid April, the daily charts had an inverted head and shoulders pattern. At that point, the Dow looked like it was going to 14,000. Unexpectedly, everything sold off, but with the recent test and hold of the 200 day moving average followed by this enormous rally, 14,000 is beginning to look more likely. Any correction at this point is a buy opportunity. Certainly, paying up for over extended stocks or ETF's means using tighter risks and shorter time frames for taking profits until we really do see a correction.
Featured ETFS:
SMH entered a long position today. Closed above the 50 day moving average at 34.79. What is a bit disconcerting, is the 50 day moving average's slope declined with today's rally. Of course that is just one of many factors. However, we do need a second close above the 50 day to confirm the phase to bullish or will not hold the long position into the weekend.
SLV booked 1.5 in profit from entry leaving a small portion of the position using a trailing stop. The 50 DMA is still declining and acting as resistance. Must now clear 36 and hold today's low 35.26.
GLD Confirmed in a bullish phase and still looking to fill 150.18-.56 the overhead gap. On the weekly chart, it is highly possible that we could see a move at least up to 154 and possibly beyond.
UUP now confirmed in a recovery phase with the second close above the 50 day moving average at 21.37. If the dollar is indeed set to rally, must hold 21.19 and close above 21.50. Looking ahead on a weekly basis, if UUP manages to get above 22, we could see a significant strengthening of the dollar.
XLF rallied right to the 200 day moving average at 15.70, closing just below. Above 15.50 on a weekly close, will clear the 50 weekly moving average. And a close above 15.70 will clear the 200 day moving average. However, a close below 15.50 and the bearish trend remains in tact.
XRT and IYT both closed on new highs. IBB got within two tics of its all time high at 110.02 on an intraday basis closing at 109.45.
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: Decided to lock in some profits on some of the deep in the money positions such as AAPL, AMZM, CRM by taking off half and reducing the position size on the newer longs. On today's video I review the strategy of looking at short-term trading patterns on the Nuggets list. Typically, when the market is in a bullish phase, I will either wait for a correction in the Condition 1 stocks for new entries or for the Condition 2-4 stocks to get into a stronger condition. Some of the pics from last night such as NVLS, TSLA, CELG, POTand others that have positive pivots, can be tracked to buy on opening range reversals. Some of the older picks that have made new highs are also good for opening range reversals, but at this point, just for a day trade. None of tonight's recommendations are overbought on the 2-day RSI.
BWA*had an opening range reversal which I tweeted about which yielded .5 of an ATR before selling off. Did not quite get up to 82.28 the old high. Now, since this is not overbought, if you did not get long today, look for either an opening range reversal with a risk below the 10 day moving average at 79.57 or since the pivots are positive, and open above 81.26 combined with a five-minute opening range breakout, and use a tight risk to today's low 80.84. Above all time highs looking for a move up to over 100. Day to swing
NETL** has three days under the floor trader pivot. The 10 day moving average is underneath at 40.04, a good risk, especially since it lines up with yesterday's low 40.05. The FTP comes in at 40.51. A move and hold above and see a resumption of the rally with overhead resistance near all-time high made at 43.70. Above that and it could continue to 55. Day to swing.
ATI*after four days under the floor trader pivot, today once it took out the 30 minute opening range and the FTP, rallied back above the 10 day moving average now at 61.76. Plus it was an inside day. Now, tomorrow's pivots are stacked positive coming in at 61.80 right above the 10 day. If this area holds, have a low risk to today's low 60.75. Then, once it clears today's high, next overhead resistance at the 70 exponential moving average 63.61. The daily chart looks like it is forming a bull flag which if closes above today's high, although it still has to get above the 50 day moving average at 64.82, measures to a move closer to 68. Day to mini.
WLT had an inside day, testing and holding the 200 day moving average at 115.37 with today's low 115.43. I would not risk more. The pivots are neutral tomorrow coming in at 116.80. An open above that confirmed with an opening range breakout, using the 200 day moving average as the risk, if this can continue up above R1 at 118.16 and today's high of 118.22, next overhead resistance is the 50 day moving average at 120.15. This week's high was 124.59. Day to mini.
PPO*made new highs and then closed down on the day. The pivots are positive tomorrow. Above 72.74, this is a good candidate to continue moving higher with a tight risk to today's low 71.93. Also a candidate for a buy on an opening range reversal against yesterday's low 70.20. Considering the price action, this is not overbought. Day to swing.
APKT has two closes above the 50 day moving average now at 72.56 and a perfect risk considering the pivots are positive tomorrow. A move above 74.02 and daytraders can use today's low 73.35. Some resistance at 76, but above that could see 78. Day to mini
WPI is a Condition 1 stock with two days under the floor trader pivot. The 10 day moving average is below at 68.16. Although today could be a bearish engulfing pattern on the daily, above 69.63 gets back above the FTP. Would consider half a position above the FTP and either risk to the 10 day moving average for swing or today's low 68.94 for a mini or day and if it can get back above R1 at 70.32, can add as it should continue onto new highs. Day to swing.
PAY was holding a long position, but exited when it closed beneath the 50 day moving average today. However, with positive pivots, it gets back above 45.82 it also clears the 50 DMA. Then can use today's low 45.61 for a good risk to see if this can continue moving up to the next area of resistance at 49.30. Day to mini.
Shorts: if the market stays firm, I would not be looking to go short. However, if the market begins to correct, these are the weaker stocks and ETF's to look at.
WHR had an opening range high failure towards the end of the day, but the risk to the highs was too great. Closed beneath the 200 day moving average and the 160 exponential moving average. Would be willing to take another shot at the short side if this breaks beneath S1 at 81.56.
GOOG huge rally from the lows which stopped today at the 160 day exponential moving average at 546.92. Still in a bearish phase on the daily with overhead resistance at the 50 weekly moving average at 556. Plus it is overbought. Will watch to see how this opens before recommending specific parameters.
MOS the 200 weekly moving average is at 67.52. If the market begins to strongly correct, this would be a good one to look at for a short. But with the 200 weekly moving average so close, unless it breaks would stand aside.
Goodnight!