Today was the lowest closing price we've had in SPY since March 18. Although the volume was above average, it did not exceed the volume from Friday therefore no Distribution day. The slope of the 50 day moving average, which had remained positive until now, turned slightly negative and the adaptive moving average crossed beneath the 50 day moving average. We can now say that we are in a strong warning phase.
QQQ broke 56, which as stated on today's video, was significant support off the daily chart. The slope on the 50 day moving average is also now slightly negative with the adaptive moving average crossing beneath it. It also did not have a distribution day in volume.
IWM closed down 1.5% and actually filled the gap that was left from March 18 at 79.59. It is possible that if today's low 79.49 holds and the price remains above 79.59, we could see some buying come in. But, at this point, any rallies should be met with selling. There is significant resistance now up at Friday's hi 81.73.
DIA** was the best of the bunch. The slope of the moving average is neutral, the volume light and the corresponding gap from March 18 at 119.01 is still relatively far away. Tomorrow, it'll be this index that will most likely be the one to let us know if we can anticipate any kind of upward movement in the market.
ETF's:
SMH** filled the gap that was left from April 19. 34.17 was the high that day before it gapped higher the following day. There is good underlying support at 33.50 and if it climbs back above 34.17, with the neutral slope in the 50 day moving average, I would most likely turn to the semiconductors for a possible rally although would expect not much more than a mini swing trade at this point in time.
SLV** I first bought this on strength and then I bought it on weakness. However, I got stopped out both times. Now, I will keep my eyes on it again. It is trading beneath the 50 day moving average, whose slope is neutral and if it can cross above the adaptive moving average at 36.68 we would most likely see at least a test of the 50 day moving average of 38.28 and possibly beyond as the last several weeks of trading could be a base. However, if the rest of the market remains weak, I would not be looking to buy SLV as a first choice.
IYR** had an inside day today settling beneath the 10 and the 50 day moving averages but hanging on for dear life to the 70 day exponential moving average at 59.97. It is now in an unconfirmed warning phase. If the 70 EMA breaks tomorrow, this is one to consider going short with a conservative risk to the floor trader pivot at 60.35. The only caveat is that the slope of the 50 day moving average is exactly neutral. Use trailing down stops to protect the short. Overall, this could have put a top in place in which case we're looking at a measured move down to at least the 200 day moving average of 56.82.
USO** had an inside day today and is trading beneath the 160 day exponential moving average. With the 200 day moving average so close at 38.05 the risk reward to go short is not good, but if it gets back above the 10 day moving average at 39.53, that clears the 160 as well in which case you have a possible long with a risk down to Friday's low 38.85 and potential move back up to the 50 day moving average of 41.74.
All of the ultrashort ETF's are beginning to look a bit overbought although all of them had cleared the 50 DMA and the 70 EMA for now. Will most likely wait for short term trading patterns for a new entry.
Picks:The minimal amount of pics is probably the best reflection of the market that is looking oversold yet has no real compelling case for a rally. At this time, I prefer to focus on the indexes and the ETF's mentioned above. I am very careful to only select stocks that have the greatest potential and the least amount of risk in consideration of those of you who are mini and swing traders.
TIF**if the market firms, this would be a good one to watch as it now has four days under the floor trader pivot and is holding the 10 day moving average at 72.83 plus had an inside day. The low from Friday 72.06 gives it a reasonable risk should it get above the FTP tomorrow at 73.13. Day to mini.
VHC**has two days under the floor trader pivot after making new all time highs last week at 30.50. The 10 day moving average comes in at 24.88 and the 50 day moving average at 23.79 making this a reasonable trade for either a mini or a swing if the market firms. The FTP comes in tomorrow at 26.60 so another choice is to use a very tight stop under today's low 25.65, especially if trying to day trade. Day to swing.
CRM The MACD is showing signs of vulnerability, but with two days under the floor trader pivot, if you can cross back above 143.35 tomorrow you've got a tight risk to under today's low 141.96. Again, thinking of this as more of a day trade and possibly mini swing if the market confirm.
DGX only a .63 ATR but good daily average volume. Had an inside day today and narrow range. Resting right on the 10 day moving average at 57.87. Has two days under the FTP which comes in tomorrow at 58.01 giving you a very tight risk to the 10 day moving average. The 50 crossed over the 200 weekly moving average a couple of weeks ago indicating there is potential should the market firm for a rally at least up to the high that was made on April 19 at 59.39. All-time high was made in 2006 at 64.69. Mini to swing.
PTEN this turned into a condition one stock last week when the 10 crossed back over the 50. Today it had a significant move down breaking beneath the 10 day moving average but coming close to the support area where the 50 day moving average is at 29.21. It is now listed as an oversold condition 2 with two days under the floor trader pivot. The FTP is at 30.09 which gives swing traders an opportunity to buy against the 50 or mini swing traders to buy against today's low 29.63. Day to swing.
Shorts:
NOC*on Friday it broke beneath all of the moving averages and today approached a death cross. Had an inside day. Has four days under the FTP so a bit oversold, but if this comes in lower tomorrow you can use the FTP at 63.37 as a tight risk. The action over the last several weeks with the break of the 200 day moving average looks like a top with a measured move down to the nadir low made in April at 59.87. Day to mini
SINA*before I left I wrote that this looked like it could be topping out. And, after rallying for three days last week gave it all up on Friday. At this point, I would either look to sell strength against the 50 day moving average at 119 or on weakness and a failure of 108.50. There is some support at 104.21 but if that breaks looks like we will head down to the 200 day moving average at 70. Day to swing
Goodnight!
