Beginning with IWM-if we go back to that March 15 low at 77.57 and look at the low that was made on June 16 at 77.23, we will also see that although it took out the March low, it held the 200 day moving average and closed above that March low. That was the day that it closed with a DOJI candle. We then spent the next couple of days consolidating and finally today had the gap higher with good follow-through and a close above the adaptive moving average at 80.22. We also had an accumulation day in volume. That's the good news. The news to be wary of is first the 50 day moving average actually declined further today. Second, is that we have good resistance at 80.76 based on the low for May 25 which was the bounce point before we had the fake out rally preceded by the dump. I like when I see clear daily chart points such as 80.76 since today's high was 80.77. Therefore, without thinking too much about next direction, ideally we should hold today's low at 79.42, test the adaptive moving average at 80.22 on the open and hold it, then continue the move up above today's high 80.77 thereby looking at the next level of resistance at the 50 day moving average now at 82.33. Otherwise, if we run into resistance on the open at the adaptive moving average at 80.22 and fail today's low, not such a healthy sign.
SPY closed up 1.4% breaking out of the resistance from the 128 area with today's low 127.75, and stopped just shy of the adaptive moving average at 129.70. Plus, although it had an accumulation day in volume, the relative volume compared to last Thursday and Friday is still low. The slope on the 50 day moving average in that index declined further. Though unlike IWM and QQQ, it never came close to testing the Spike low of March 16 at 125.28 so although it's been in an accelerating warning phase, that March low and the 200 day moving average have proven to be powerful support to date.
QQQ after holding support at around 53.63 for three days with an inside day yesterday, had the biggest gain seeing as it was the most oversold with 2.1% higher. Similarly, had an accumulation day in volume but just marginally higher than the average daily volume. It also has returned to a warning phase. It'll need another day above the 200 day moving average at 54.77 to confirm its move back to a warning phase so that is the first area that must hold tomorrow. Then, if it can clear 55.11, the adaptive moving average, it has a lot of room to the upside before it runs into major resistance at 56.75. Since that too has a declining slope on the 50 day moving average, will watch the 200 day moving average especially on a closing basis very carefully.
ETF's: XRT did the job closing back above the 50 day moving average now at 52.25. As with all phase changes, we need a second day to confirm that it is indeed a change back to bullish from warning. Of course, the retail sector has never indicated a strong warning phase like so many other sectors and groups.
IBB is still in a weak warning phase, and did not quite have the same level of strength as the retail sector closing just beneath the adaptive moving average at 104.27. The three tops that were made in April, Mid May and then again at the end of May confirmed as such once it broke down beneath 104.50 a couple of weeks ago. Now, if he gets back through 104.50 we will be looking at a test at the 50 day moving average at 106. Otherwise if it cannot get above 104.50 and starts to rollover, another not such a good sign.
SMH came back through the 200 day moving average. Similar to QQQ, it is held the March low even as it entered a distribution phase. Now, back in an unconfirmed warning phase still has plenty of overhead resistance to get through beginning with 33.50. Now watch 32.70 the 200 day moving average as a key number to hold.
XLE had an inside day today.
XLF is also noteworthy as today's rally might have confirmed at least a temporary bottom in place at 14.62, but the daily and weekly charts are so broken down that at this point, we first must get through the 50 weekly moving average at 15.45 and then above that, the 200 day moving average at 15.67. Plus, the 50 day moving average is rapidly approaching a cross with the 200 which will put this ETF into a bearish phase.
GLD underperformed the market and remains another interesting piece of the puzzle. The fact that it's held firm even with the market rally could indicate just how tentative this rally might be as nobody rushed out of gold with a big sigh of relief that everything is wonderful again in the world economy.
SLV** was lackluster closing higher on very light volume, and failing to get above the adaptive moving average at 36.07. There's been no reason to go short at this time, but still a candidate for a sell off.
Finally, EURUSD now testing upper end of the range with resistance between 1.44 and 1.45. Clearly, 1.42 has proven itself as good intermediate support.
We began accumulating a bunch of long positions towards the end of last week and added a few of them today. I continue to encourage profit-taking at the targets, especially on those that are working off oversold conditions and not stacked and sloped. Furthermore, with so many stocks up on huge percentage gains today, will probably watch the indexes for further validation on whether or not today was the beginning of a summer rally or the rally into resistance with a resumption of a summer slump.
Picks: The list has been hot and added some great opportunities today that included DISH, GMCR, CRM, HLF and even PLCN which moved up $29. Given today's big rally, tonight's list is comprised of those that offer the best risk either for establishing new long or short positions. Other than those of you who day trade, if you have any questions about the management of existing positions, please do not hesitate to ask as it is very difficult to follow every single recommendation that I make considering some of you trade for mini swing targets and others stay in for swing trades. With that said, the most difficult part of trading is not getting into a trade it's knowing when to get out. I am happy to help you make those decisions.
MA* I'm keeping this one on the list because although the buy opportunity ideally happened today after a 30 minute opening range breakout, considering this had a bullish engulfing pattern and an inside day yesterday, plus it only slightly outperformed the market, this could set up again for another low risk trade. 272.70 was the opening range high and intraday support. The 50 day moving average which is sloping up comes in tomorrow at 274.66. Floor trader pivot is at 273.20. Depending on how it opens, would look to buy against the pivots using the intraday support as a reasonable risk. It tried to get above the 50 day moving average today stopping at a high of 275.44, therefore it must close above the 50 DMA to stay strong and look like it could possibly go to major resistance at 290.Day to mini
REGN*had this big move up on June 15 to 61.05 after making all time highs in April at 71.74. Both spikes were met with selling and today not only underperformed the market but also has four days under the floor trader pivot. And the FTP is stacked neutral. Add an inside day to the mix. The slope on the 50 day moving average which it is hanging onto, is up. Can buy above the FTP at 53.33 and risk to yesterday's low 52.50. Also has to clear R1 at 53.90 and more importantly to stay in the position, the 10 day moving average now at 55.08. On the weekly chart, a reasonable target is 62. Day to mini
BEAV*I'm still long this but I'm putting it on the list because it had an inside day so close to the recent highs. At this point would like to see it trade above 39.20 which is pretty close to the current price. Tomorrow, the FTP comes in at 38.77 so if that holds and it can take out 39.20, has a decent risk. The trade is in anticipation of it getting through 39.20 than 39.50 and going on to a projected move up to around 47. Day to swing.
TSL*continues to hold the 200 weekly moving average now at 18.61. Had an inside day today and closed just above the 10 day moving average at 19.66. The floor trader pivots are positive so can either look to buy against S1 19.28 with a risk to the 200 weekly, if it holds the FTP at 19.51 with a risk to under S1 or above today's high which then clears the 10 day moving average 19.74 in anticipation that this time we might see a move up to 22 which is what we were looking at the last time we went long. Day to mini
EQR*had an inside day closing above the 10 day moving average which came very close to today's low 59.58. Provided it holds today's low, since the floor trader pivots are positively stacked, can buy above 60.02 (R1 is at 60.05) and risk to either the floor trader pivot at 59.81 or today's low. All-time high was made on May 31 at 61.86 which is a good first target. Day to mini.
ISRG although it is approaching short-term overbought conditions, today it held the 50 day moving average at 350.88 with today's low just beneath at 350.09. Plus, S1 comes in tomorrow at 350.00. That means we have a discernible risk. The pivots which are positive come in at 352. A two dollar risk on a stock that has a 6.61 ATR is good for any timeframe. If it can clear today's high at 354, next resistance is up at 363. All time high was made in April at 377.84. Day to mini.
Shorts:
GS although the pivots are still positive tomorrow, ended on an opening range high failure and so if it breaks beneath the FTP at 135.82, especially if the financial sector gets weak, could have an opportunity to go short again using 137.33 as a risk. Now, once this breaks beneath 134, it will take out the recent consolidation and continue the move lower with its most recent support at 131.50. Day to mini
CME had a death cross last week. Now, has had a strong rally off of the lows and is approaching overhead resistance at 289.50. This could go higher, but since it is in a bearish phase, if it begins to break down beneath the floor trader pivot at 281.50 could have a low risk short using today's high at 283.73. Day to mini.
WHR took a very small short position today on the opening range high failure. Since I never got stopped out I stayed with it. Now I will either cover above R1 at 78.32 or if it fails S1 at 77.65 and then again today's low 77.55, will add to the short position. It has some support now at the 10 day moving average at 75.10 and better support at the 200 weekly moving average at 72.81. Reminder that the only reason why we are even considering this as a short position is because of the death cross on the daily moving averages. Day to swing.
Join us for Live Coaching Tomorrow
Goodnight!
