Last week I wrote about "Operation Twist" a Fed tool used in 1961. Friday, Reuters did an article about that and other FED options. I am no economist, but that option resonated with me. Here's a direct quote from a poll by Reuters: "For markets, it's a fait accompli: the Federal Reserve, which meets on Tuesday and Wednesday, is expected to push for some variation on a 1961 policy, known as Operation Twist because it aims to push down long-term borrowing costs while nudging short-term rates higher. Primary dealer banks polled by Reuters two weeks ago, just after the Labor Department reported the U.S. job market had stagnated in August, saw an 80 percent chancethat some of sort of twist-like measure would be put into place." Pedro da Costa author and true economist.
SPY 5% gain, 5 days up in a row and still uninspiring volume. But, did get the close above pre downgrade week as all eyes on FED meeting coming up. Still not in positive territory for the year. 125 next major weekly overhead resistance with the 50 DMA at 123, sharply sloping down. Following a huge wedge which appears to be halfway through. Obviously should be flexible and prepared for anything.
DIA Here's another example-slope of the 50 DMA declining. About 2.00 away from top of range. 112.30 key support.
QQQ Not only kissed the 200 DMA, but also gave it a giant bull hug and closed above giving Nasdaq an express track last week from bear to recovery to an accumulation phase (unconfirmed until second day close above 200 DMA.) Volume was good, 3rdAccumulation. Hasn't crossed S1 since August 9th. As the price accelerates so does that level now at 56.22. Noted as a good risk point for longs and perhaps an indication of a correction as far down as 54.00, next major support level.
IWM 74.00 the top of the range. 69.50 now support
ETFs:
GLD Bought GLD on Friday once it took out Thursday's high. Took some profit but kept a bit with a cushion to see if it can trade above the adaptive moving at 176.65.
SLV Bought this too but got out since the 50 DMA is close to the adaptive and the price needs to clear this level convincingly one way or another. I wrote about the slope of the 50 DMA as positive making Thursday's close beneath a sign of a weak warning phase-I talk about slope a lot and am happy to answer any questions on how it pertains to gauging phases.
SMH Led this rally up and important to track for sign of whether or not this rally continues. Still long. Overbought which means a close under 30.50 not a bad place for a stop on balance.
IYT Got close to 85 with resistance at top of range 86.00. Support now at 81.65 level.
XRT** Had a death cross today right at the moving averages. Tested the highs from last swing at 50.50. Still consider a short against Friday's highs if fails 50.00 with a confirm under 49.60 on a closing basis, under the 50 weekly moving average and S1. Rare to see price at the moving averages when they intersect.
XLF Filled gap closed beneath. As always, has to come to the party or trouble for the other guests.
IYT 2 DOJI days in a row which means major indecision at these levels. 85.00 weekly resistance. Since transportation tends to be a great overall gauge, was the first to collapse from the highs in May and like XLF, has to stay at the party to keep the rally going.
Longs: The OR reversal-can I say it enough? WYNN CMG BIDU SINA HUM CERN-some of the picks that worked last Friday. Of course not every pick works, but most did beyond expectations which means the ones that do and trend way make up for the ones that do not if you follow a plan consistently. Note-Targets: You never know of course, likeAMZN which surpassed mine by $10.00, but we left on a tail. That is my advice, lighten at targets, leave a tail and raise your stops. No recommendations are overbought at this time. Also note I cannot track every pick and the stops and targets daily-if I originally mention it is good for a swing trade and it setup according to the plan, please feel the confidence to stay in for a swing trade. If in doubt, please ask. (This goes for shorts too). I refresh the list daily to keep it well, fresh. And, even if I do not take a trade personally, if I write and tweet about it, please feel free to do the trade-examples DECK ISRG ORLY NFLX.
GMCRCondition 1 closed right above the pivot with a lackluster day. Pivots positive at 108.29 making this a good OR reversal candidate although I would not hesitate to buy a breakout, especially if lines up with R1 and Friday's high 111.15. Last week's high was 114. Could see 120 next. Risk swing under 103.15 and for mini Friday's low. Day to swing
SINA**Now 2 days under the FTP at 109.78 and a Condition 1 that held the 10 DMA at 107.96, a good risk point. First target 127.00. Day to swing
PANLCondition 1 with 2 days under the FTP at 54.74. Good risk Friday's low 52.90. Must clear R1 as well 56.58, but with Condition 1's you can buy half over the pivots and add over R1. Recent high 63.68 with a possible target at 90.00 Day to swing
BIDU Nearly had a second inside day today but took out Thursday's low by 1 little tic. Provided 145.50 continues to hold, pivots negative but 2 days under with FTP at 146.83. Must clear 150 and then target 159.50. Day to swing
Hon Mention: CREE (ID must clear 34.42) Longs from Friday tweeted: PCLN (2 days under FTP at 526.59 ID must clear Fri high) CELG (has to clear 65.00) CERN (through 69.40) CMG (2 inside days, must clear 318.20 and hold 313.35) WYNN (must hold 149.90 and clear 152.70)
Shorts:I found way more good short setups than long ones-find that interesting
ATI Inside day, negative pivots at 47.49 risk 48.20. Could see 46.00 then recent lows 42.40. Under that another 10.00 drop possible. Day to swing
CTRP Inside day, negative pivots at 38.25 and would not short above 38.85. Recent lows 35.35, under that could see 30.00 Day to swing
SMG 2 inside days in a row pivots negative at 47.16 with maximum risk 47.55. If breaks 46.00 see next 44.94 then 40.50 Day to mini
TZOO Inside day but positive pivots. Risk is over 33.00 and must break S1 at 32.15 to see 21.35 the 200 weekly moving average. Day to mini
JOYG Inside day with bearish engulfing pattern and negative pivots at 81.67. Risk 82.80. Some support at 74.50 then 69.15 with the 200 weekly at 59.15. Day to swing
EWZ inside day and negative pivots at 60.93. Risk 61.91. Target 58.20 then 56.00 Day to swing
Note: SDShas to clear R1 23.05 for reversal trade long SKF 74.15
Hon Mention: CAT (provided it does not clear 87.46) SLB ( provided it does not clear 74.61) CPX(Provided it does not get above 27.28) Shorts from Fri tweeted in play-CPT (risk now 64.10) FSLR (82.81 recent low) ACOM (Recent low 26.59, under 20.00 support) SHW (must now break 74.10)
Have a great Sunday!