After a consolidating session pre-Thanksgiving, post-holiday saw a gap higher and excellent follow-through. Apart from the gains in the indexes with NASDAQ percentagewise, the biggest gainer, the major sectors and groups firmed as well, although with divergence important to note. Retail, Semiconductors and Commodities (particularly SLV) related groups had the greatest gains while financials, transportation slightly underperformed. And most noteworthy is that real estate well underperformed. Since the gap higher that began last week, the price action yielded phase changes in S&P 500, and the DOW (DIA). In fact, the Russell 2000 ended just below its 200 DMA and NASDAQ still has room to go. Therefore, one has to be prepared that the rally to resistance is also a possible sell opportunity. It seems that watching leading stocks like AAPL, AMZN and GOOG will be an important clue
S&P 500 (SPY) Friday's low is now important support if this rally is to either begin the week with digestion or continuation. Another key is the declining slope of the overhead 50 DMA. That ultimately is the true test of how this year ends. Subs: The 70 EMA is now pivotal at 141.00. RSI on the daily is now high
Russell 2000 (IWM) The 200 DMA is 80.50. All eyes will be there as we start the week. Any sign of weakness against the moving average could renew selling. Otherwise, watch for this area to clear or at the very least, see Friday lows and hold with some digestion. Subs: Critical point to assess next direction. If this comes in lower, the perfect risk for a short is at 80.50 with fudge. If holds and clears the 200 DMA, the RSI will be less important-risk more important.
Dow (DIA) 129.60 is the 200 DMA which either will hold and spur a run to the overhead gap 131.20 or, also viable that it will fail the 200 DMA and test lower levels. Subs: At this point, price is paramount. More so than RSIs or volume meaning that it will be price now that could bring in many sidelined investors.
NASDAQ 100 (QQQ) The gap high from 11/7 is 65.10. That is first resistance. Next, is the obvious 200 DMA 65.45. Friday's low becomes important to hold so traders can assess if the overhead resistance is a game changer or a good reason to think the rally will be short lived. Subs: AAPL 571.91 is last week's high, then 574.54 is the week prior high to clear. 555 area to hold GOOG Underperformed and has not cleared channel. Keep eyes on leaders.
ETFs:
GLD The 167 level I wrote as the key area of support, held which spring boarded this to end the week on an unconfirmed return to a bullish phase. 169 the 50 DMA and key to hold
SLV Tweeted about the buy last Wednesday on the public stream. Now, unconfirmed bullish phase making the 50 DMA support 32.25 ad 34 the next objective.
XLF (Financials) As expected, this ran to and closed above the 50 DMA returning to an unconfirmed bullish phase. Market needs the fins happy, so watch for the 50 DMA to hold. Gap to fill above at 16.01
IBB (Biotechnology) Now, the 50 DMA is the moment of truth on this group that began this move higher before the others followed, but phase- wise, not the leader anymore.
SMH (Semiconductors) Ran to the 50 DMA but has to clear and stay there for the fun to continue.
XRT (Retail) The sector that had to lead and did its job. Now, 63.40 is a trend line from the all-time high made in September.
IYT (Transportation) Subs: Underperformed but cleared the 50 DMA which is still in a negative slope. If cannot hold 89.50, then could still be a sign of a white cap scenario.
IYR (Real Estate) Cleared the 200 DMA for an unconfirmed phase change. 63.25 has to hold. This group still underperformed on a percentagewise basis on Friday.
GDX (Market Vectors Gold Miners) Subs: Unconfirmed phase change to warning if 200 DMA holds
USO (US Oil Fund) Subs: If cannot clear 32.53, will start to look for a new short by going to SCO
XLE (Energy) 71.05 first area of support to hold. Then, the 200 DMA. 71.90-72.00 next resistance
TBT (Ultrashort Lehman 20+ Year Treasuries) Interesting narrow range and underperformer on Friday. A major area to watch for confidence in whether investors will flock to bonds for safety, or feel ok buying equities.
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: With short week, keeping list down for new swing longs to ones with the least amount of risk
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:
CVLT 3 days under pivots. Has to hold 62.56, clear the pivots 63.20 and then Friday's high and R1 line up.
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:
PVH Inside day. Over R1 clears Friday high. Then, over 111.95 should make another move up. Risk 109.25
AEM If not already long, now, have to wait for 57.00 to clear to see new highs. Friday low has to hold.
JBHT Improved to condition 1. Like to see the 10 DMA hold59.48 and clear R1 and Friday high.
SBAC Returned to condition 1. Like to see it hold 67.50.
C Compression over last week with a move over 36.42 and a hold of 35.75 a reason to look at this with a potential move back over the 200 weekly a reason to hold for swing.
MTB Prefer this one on a reversal against 98.90.
URI Inside day. Over 41.65 next stop 43.13. has to hold Friday low.
DE Back to unconfirmed phase change to bullish and condition 4. Has to hold Friday low. Inside day. Has to clear 84.33.
Phase Change: XEC Unconfirmed phase change to accumulation. 62.77 pivotal. Has to clear 63.64 at a minimum MTH Only real estate stock on list. Has to clear 36.42. (Note: BXP another to watch if group stays strong). AAP Broke through trendline Friday. Now, a reversal 78.49 would be a low risk opportunity. PAY Confirmed phase change to recovery. 30.60 the 50 DMA has to hold. DOJI making 30.80 a good point to watch on Monday open. CNX Has a gap overhead to 34.70 which if can hold 32.40 and then clear the 50 DMA 32.90 can see. ANF Inside day. 3 DOJI shooting star candles. Over 44.52 could see move to 46-47.00. WAT If holds 83.12, through Friday high could see 86.00 and better
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
FAST Cannot clear Friday high and would like to see the FTPs
WLP Has to break Friday low.
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
HLF Inside day against the 50 DMA 49.52. If breaks S1 could see quick drop to 46.60
CMG Under S1 also breaks Friday low.
Bye for Now!
