Although neither as sobering nor tragic as Sandy, one does have to assess the Friday damage to the market and look forward with a logical plan. Of course, with US Elections on Tuesday, all plans are subject to change; therefore best plan heading into this week is mainly cash. Market Internals indicate S&P 500 to be short term positive, long term neutral. NASDAQ internals indicate both short and long term neutral. And the VIXX is in the bullish zone. The SPY is hovering around levels seen in 2008 before the crash. What held and are the first places to look? Financial ETF 16.00 (closed marginally under at 15.97) support, Real Estate, Retail and Semiconductors fast moving average support. Bearish engulfing patterns SPY and QQQ with Friday's move lower. The SPY and Russell 2000 ran right up to the 50 DMA resistance and turned back as if to say "Never mind." More details below:
S&P 500 (SPY) Distribution day in volume. Best I see is that it held the week of 10/26 low at 140.39. Begins the week with a serious limp, but with some physical therapy, not so crazy to also keep open to a rally. Subs: Negative Pivots
Russell 2000 (IWM) Nasty candle but at least after a huge surge in volume on Thursday's up day, Friday's decline had comparatively little. But, 80.56 is the 200 DMA and unless it can get back over 81.90 area, seems that we shall see that and possibly worse. Subs: Pivots Negative
Dow (DIA) Never made it to the 50 DMA and real close to the 200 DMA
NASDAQ 100 (QQQ) As written last Thursday coming into Friday, the low volume bounce off of the 200 DMA meant we had to see buyers in AAPL and GOOG. Now, with a close on the 200 DMA and no cooperation from the big guns, unless SPY takes off, this looks sure to break the 200 DMA and at the least, test the 10/26 low 65.35. Subs: Pivots Negative
ETFs:
GLD Gapped lower and kept going south.161.50 its 200 DMA.
XLF (Financials) 16.00 was basically defended after it jumped off the 50 DMA on 10/26. Either this takes back a lead or bye bye 50 DMA next time. Subs: Pivots Positive
IBB (Biotechnology) The end of a year long run.
SMH (Semiconductors) Tried so very hard to hold that 65-weekly moving average. Alas, back in a unconfirmed bearish phase which means it has to clear last week's high or 28.50 not out of the question.
XRT (Retail) Besides Financials, the best hope after all the good economic numbers last week. It held the 50 DMA which means, along with the fins, is the other bullish sector to consider.
IYT (Transportation) In your face 200 DMA as it runs back to the 50 DMA bench
IYR (Real Estate) Cleared and held 64.45 an area which kept the oxygen flowing. Also an interesting looking hammer candle. Gotta keep eyes here as well as on fins and retail.
USO (US Oil Fund) Declining oil.
OIH (Oil Services) Under 38.18 not too pretty
TBT (Ultrashort Lehman 20+ Year Treasuries) Basically closed on the 50 DMA making this a wildcard
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: Ended week back to cash. Picks are only ones that outperformed and could still see upside. I caution all ahead of the US Elections
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:
EXP Has to hold the 10 DMA 50.52
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:
VMED Inside day. Has to clear 33 and hold 32.26
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:
JBHT Max risk 58.59 Friday low. Did well compared to market
PII Has to hold 85.57. Eventually clear 90.00.
EBAY Sideways action which means has to clear 49.60 and hold 48.45
NBL.Golden cross. 93.95 should hold. And really needs to get back over 95.40
PXD Inside day. Neutral pivots and underperformed market. Has to hold Friday low and clear 110.50
DDS Reports 11/9 before open. Inside day. Has to clear 80.63 to keep going. Risk Friday low
TIF Reports 11/29. Inside day. Has to hold Friday low and clear 66.78
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:
TRV Has to hold the 50 DMA 68.50 and then clear R1 which lines up with Friday high.
Phase Change: FB 20.73 max risk and like to see it fill the overhead gap. BXP confirmed phase change to accumulation. Has to clear Friday high. GOOG 687 still a great risk area and if this holds, would look for a buy. Otherwise, under 687, a test of 670 area likely AMZN If holds 230.35, another one to look at. However, has to clear 238.70 as well
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
VFC Cannot clear 160.35 and should stay beneath the 50 DMA 158.15. Then could see 153 or lower.
NUS under the 200 DMA and has to stay there. Could see drop to 44.25 the 10 DMA
SHW should stay under 143.92 and could see 132.
AMGN Had a slingshot and underperformed today. Really should break 86.12
ASH Has to stay under the 50 DMA 72.40. Then could see the 200 DMA or lower.
CLF Should stay below 36.92 and break 36.00
