If you put flowers in your hair today thinking all is good in the world again, they most likely wilted by the end of the day. Yes, the Dow closed over 14,000 but the indexes failed to hold Wednesday highs and had a fairly impressive selloff at the end of the day. With Capitol Hill antics abound and the end of the week upon us, plus, since the market did not penetrate Monday's highs, I recommend taking it easy to see whether this was the second attempt and failure of the highs for real, or just a digestion day amidst a volatile week.
S&P 500 (SPY) Held the fast moving average but failed to clear Monday's highs. Under today's lows suspect another test of 150 could be in the cards. Cancel that if clears 152.86 Subs: Pivots positive in all indexes
Russell 2000 (IWM) Failed to close above the fast moving average. Still showing a top in place which means unless we get through it, see a test of the 50 DMA next up Subs: Watch TWM again tomorrow in case-21.60 is pivotal
Dow (DIA) Another possible slingshot high. Watch the fast moving average
NASDAQ 100 (QQQ) Confirmed the bullish phase, but closed red which means that could be ephemeral unless Monday's highs clear
GLD So, did you short under 154 after Wednesday's inside day? Sometimes it's just that easy. Especially when it is in the direction of the phase. Subs: 152 now some support
XLF (Financials) Closed under the fast moving average. 17.19 the 50 DMA
IBB (Biotechnology) Overall still sideways for 2013 Subs: Interesting test and failure of the top of the trading range-but an outperformer nonetheless
SMH (Semiconductors): Monday and Thursday highs now looking a bit double toppy unless clears.
XRT (Retail) Monday high had to clear and it did not-so it still has to
IYT (Transportation) Tested and retreated from the highs-interesting as this is the one to watch if market improves
IYR (Real Estate) 68.88 recent highs to clear
USO (US Oil Fund) After 2 Inside days, it failed the previous day low and closed weak.
OIH (Oil Services) Monday high also key and it could not clear Subs: Could not close above the 80 monthly moving average so now we wait for a new setup.
XLE (Energy) A doji month. Have to think the uncertainty reflects the whole overall market uncertainty
TBT (Ultrashort Lehman 20+ Year Treasuries) Could not clear the 50 DMA Subs: Through 66.05 on a confirmed Opening range setup with good risk and I will look to get long yet again
DVY (Select Dividend Index) Possible slingshot high
XOP (Oil and Gas Exploration) Subs: I like the chart but it does have some overhead so want to see some digestion before we jump and today, it had a doji so patience is good for now
XHB (Homebuilders) Subs: I would look for a rollover if breaks S1
UUP (Dollar Bull) 22.20 is support at the 200 DMA and 22.65 overhead resistance
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: Anything that is on this list is a candidate for a swing trade-(of course market condition is a factor) -use the max risk mentioned along with an opening range stop using fudge factor and time confirms. I suggest you decide on 1 or 2 that have a risk you like and then position size accordingly.
Category 1: (Aloha) N/A
Category 2: (Pipeline) N/A
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: (Opening range reversals are good on anything above S1)
Post Earnings Trade: GPS A gap above 33.88 would be strong. Otherwise, if 33.50 holds could be good regardless
BSX Barely closed over the 10 DMA and still looking for a move over 7.47 with risk under S2
HES Has to hold the 10 DMA 66.05 and move back over 67.00
SWK Had a reversal and went to 79.00. If you look back at last night's notes, perfect. For now, has to clear 79 and hold 78.00
HOG Still in play over Wednesday high but now really has to hold 51.92 the 10 DMA and a reversal is better for risk
UTX Also has to hold the 10 DMA and clear 91.20
ROK Today's low now max risk
BA After Wednesday's big day, inside day and with positive pivots, good risk to S1 and today's low. But still has to clear 78.00
Category 4: (Rip Tide) N/A
Phase Change: RAX Today's low a tighter risk and still has to clear the 10 DMA YELP confirmed accumulation phase. Has to hold 21.55 and clear 22.50 next X Slingshot low now and an inside day so still eyes on. DFS holding the 200 DMA at 37.67 and really needs to clear the 10 DMA then the 50 DMA COST Unconfirmed return to bullish phase with max risk to under today's low CMG Pushing against the 200 DMA with an inside day and has to clear 320 FB Had news end of day and closed at R1. If holds 26.60, could be back in gear
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
OC Weak warning phase but if fails to clear 39.83 could see a drop to 37.50
LULU If cannot clear 68.00, then could see another test of recent lows and perhaps lower
FRAN Inside day and cannot clear 26.00 with 24.00 recent support
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
BIDU Only if breaks S1
ALXN Only if it breaks S1 and fails the 10 DMA 86.11
Bye for Now!
