All indices except NASDAQ 100 (QQQ) changed phases from strong warning to distribution. We like a 2 day confirmation of phase changes, but more importantly is the break beneath the 200 DMA. Is it possible for this week to bring renewed life and a return back above that moving average? This is when we return to the 3 signs of a bottom. 1) Double the average volume on a big down day. 2) A big green candle with an accumulation in volume 3) Consolidation and break over resistance, again with decent volume. Until one of those scenarios play out, assume the market will trade lower and that meager rallies offer sell opportunities.
S&P 500 (SPY)123.90 a key monthly moving average. 125 interim support. 129.55 initial resistance
Russell 2000 (IWM) 70.00 the monthly moving average. 75.55 resistance at the 200 DMA
Dow (DIA) 122.35 the 200 DMA resistance. Now negative for 2012.
NASDAQ 100 (QQQ)* 59.75 the 200 DMA as this is the one index that if has any chance of recovering from here, should be the first one to watch. Remains in a strong warning phase.
ETFs:
GLD After the gap up, the possibility of that double bottom I wrote about last week seems more probable. The 50 DMA stopped the rally for now. But over 158, assume it will continue, and unless it breaks under 155, assume dips are buy opportunities.
XLF (Financials) It was sad to say goodbye to the 200 DMA. But is it farewell? 13.76 is the resistance area with 13.38 the 2012 low to note
IBB (Biotechnology) 116.43 April low. Oversold on the daily relative strength index. Another good one to watch for any signs of relief
SMH (Semiconductors) 28.60 next support
XRT (Retail) Another one like QQQ, in strong warning and a key to any signs of a rally
IYR (Real Estate)* Closed right on April low. Higher open, could see return to 61.00. A lower open and 58.00 next support
USO (US Oil Fund) 30.93 2010 low. 29.10 the 2011 low. Plus this is very oversold. Subs:* Hard to believe our love affair with oil at these levels won't kick in
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: Sometimes it's better to point out how my service helps you manage your trades. Think about how smart we look now taking 1/2 ATR in profit and reducing position sizes in X PNC EL last week- and we stopped out of the balance last Wednesday with minor losses-look at them as of Friday's close. Furthermore, we were able to subterfuge the losses with big gains in shorts, NSC in particular.
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:
FDO Only 1 day under the FTP. Outperformed but now must clear R1 67.68
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:
EW Held up well. 3 days under pivots. Must clear Friday high
BBBY Only interested if clears back over the 10 DMA 71.50 and closes there
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: N/A
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:
SWI Oversold and on the 50 DMA which means max risk Friday low and should clear first the pivots, then R1 to stick. Holding the gap from late April
QCOR Over 41.10 worth a look
Slingshots🙁Note-unless confirm, these are possible slingshots.) EQT Held 200 weekly 80 monthly. Inside day. Needs to hold 44.64 or could be a short.OXY Must clear R1 79.54 MCP (Not classic slingshot) but closed up. Positive pivotsOver 20.42 clears the 10 DMANFLX Needs to clear R1 64.23
Shorts: Very oversold. Have to wait for some new setups. I gave you lots of short picks last week, which if managed , should have yielded great profits. TIF POT ANF to name a few
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
OPEN Cannot clear 40.54
NTAP Cannot clear 29.75
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
N/A
Have great Sunday!