Dow closes in triple digits and on new highs! So, if we piece it all together: the bull phase, the correction that maintained the phase, the first to negate bearish candles near the highs, the strength of many of the industry groups, the resiliency after the one day disaster over a week ago-should we be surprised? And although the volume is good-better than it has been for most rallies, the top seekers still have a couple of valid concerns. The Russell 2000 or small caps failed to take out 92.68 the high from 2/20. That would be the main concern until it does take that high out. Of course, there are always the overbought indicators, but not as worried with that since this rally has been met with anemic buying until today so the RSIs could ramp up from here no problem.
S&P 500 (SPY) 2007 peak high 157.52 with 153.28 the 2013 high until today to hold. Subs: Pivots Positive in all indexes and will watch now for S1 and today's gap to hold
Russell 2000 (IWM) Obviously big eyes here
Dow (DIA) Watch today's gap to hold for starters
NASDAQ 100 (QQQ) Made new 2013 highs with 70 area the next overhead resistance if AAPL holds along with today's lows
GLD Subs: If cant clear today's high, look for a short under 152
XLF (Financials) New 2013 high close. Like to see today's gap hold and this make that trip to 19.75
IBB (Biotechnology) The surprise for me this year-now overbought
SMH (Semiconductors): Now it's all about 36.00 Subs: If took the swing trade, 35.00 good area to hold.
XRT (Retail) 68.96 the highs to clear
IYT (Transportation) Was looking for 110 got to 109.93..hmmmmmm
IYR (Real Estate) New multi-year high and the other clue early this week this move today was coming
USO (US Oil Fund) Subs: 2 day brick wall pattern in place now if holds conservatively today's lows. Gap to fill to 32.96 then could see return to the 200 DMA
OIH (Oil Services) Back into an unconfirmed bullish phase with still somewhat cloudy chart
XLE (Energy) Subs: 78.72 is the point to clear then could go the way of the other groups that have rallied big
TBT (Ultrashort Lehman 20+ Year Treasuries) The 50 day moving average is right there yet somehow still elusive. Like to see that clear
XHB (Homebuilders) Hasn't taken out the 2013 highs
UUP (Dollar Bull) Worked off some overbought conditions
JJC (iPath DJ AIG Copper) Subs: 2 day brick wall bottom pattern in a distribution phase. If holds today's low and fills gap to 44.42 could see 46.40 area
EWI (MSCI Italy Cap Index) Subs: Bought on an opening range reversal. Has to clear the 10 DMA now or will be wary under today's lows
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.
Note: Some recent picks we held for tails got to second targets. Newer trades, like CSC BA got to the 1.5 ATR target today. Still doing mainly hybrid trades, although keeping the tails for swings. Only stocks not overbought are candidates listed for hybrids to swing trades. KLAC OSK were 2 great category 4 trades today.
Category 1: (Aloha) 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)
ARUN 25.68 next hurdle if today's low and S1 hold
HCA Inside day which means good one to watch. Through today's high will clear R1 with good risk to under today's low. 38.00 next hurdle
HOG Held the gap higher and now needs to continue to do so with 54.00 the next area to clear
V Had an OR reversal and closed near the lows. If today's low holds, then could see a continuation of the move up
GS Cleared the 80 monthly moving average with good risk now at today's low and S1
BA Would not chase, but noting since looks very good and not overbought
OSK Back to condition 1. 38.65 now good risk if has an opening range reversal
KLAC 54.40 now the point to hold.
UTX In 2011 made an all-time high of 91.83. Now, can clear that if holds 89.90 level and get to 94-95.00
HLX Needs to clear 23.41 R1 and hold S1. On list since cleared the 80 monthly moving average
CYH Compressing and a move over 42.55 looks good if today's low holds
BEAM Phase change unconfirmed back to bullish. 61.00 area good risk with move over 62.26 good confirmation
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
RDC Inside day which means today's low down to 34.00 support and has to clear today's high
Phase Change: AVB Confirmed a slingshot with 126 a good pivotal area. Still on watch for tomorrow since did not do that much today ACT confirmed phase change to recovery. Can use 86.00 level for a risk EHTH after a big move up then down, now back above the 200 weekly moving average 15.66 MUR On the 80 monthly moving average. DOJI day back to unconfirmed bullish. Like to see 60.65 level the 50 DMA hold
Shorts:
Category 5: Titanic-N/A
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 Inside day so still watching for range break
DLR Max risk 68.08 and has to fail today's low and S1 after inside day
Bye for Now!
