Lots and lots of selling came in ahead of the official beginning of earnings season. Alcoa came in better giving it an initial post market run, which later fizzled out. Whether that translates well for the US markets, remains to be seen. All the indexes closed under fast moving averages as it's deja-vu all over again talking about the 50 DMA.
S&P 500 (SPY) Now, a return over 144.80 is the new relief area with the 50 DMA at 142.80. Significant distribution day in volume-but not enough to think blow off dump
Russell 2000 (IWM) 82.26 is the 50 DMA to watch. The logical conclusion to trade the range break today mentioned in last night's Daily was pretty darn logical.
Dow (DIA) 134.80 is the fast moving average which it closed beneath but not by that much. Therefore, more logic-look here to see if that can clear and the impact on the rest of the market.
NASDAQ 100 (QQQ) Sliced through the 50 DMA but with enough volume to make a possible scenario for that blow off dump mentioned above. What would confirm that? Watch to see what AAPL does Subs: AAPL R1 and today's high line up
ETFs:
GLD Was the October 4th the huge 2012 double top? 170.05 is the high of9/26 the day before it gapped higher-watch that to see
XLF (Financials) 15.77 support.
IBB (Biotechnology) Keeping out its way for now
SMH (Semiconductors) 30.86 the 9/26 low held. Wouldn't put high stakes on that, but good to note
IYT (Transportation) Subs: Touched back to the channel line. Perhaps if oil is weak and this clears 89.30 might look at it
IYR (Real Estate) In hindsight we can see that 9/25, when this was first to break the 50 DMA, QE3 might not be all it was supposed to be
USO (US Oil Fund) After 2 inside days, this was a doozy of a range follower
OIH (Oil Services) This held 39.00 and did return move over the 200 DMA-for now
XLE (Energy) Sloppy but still a contender
REE (Rare Earth Element) Subs: Inside day
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs held the 200 DMA so far
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: At this point, mostly all trades should be day to miniswing. If prefer only swing, might have to sit out for a bit until the indicators clear.
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:
CF Through today's high also clears R1 and the 10 DMA
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:
SWN Reports 11/01. 35.15 max risk and over 36.00 should stay strong
TROW 2 Inside days. 63.34 max risk
EQT Closed just on R1 so now 60.11 should hold
MCK Reports 10/23. 89.40 good risk
RRC Improved to condition 1. 69.68 good risk
AGU Improved to condition 1. Today's low must hold
RKT Improved to condition 1. Today's low good risk
MET Reports 10/31. Improved condition to 1.Mar risk 34.89
SRPT Inside day. Today's low is a tight risk
XOP Today's low max risk
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:
SINA Today's low max risk as oversold on daily and sitting near the 200 DMA
Phase Change: F Takes discipline to stay long when market is diving. But, this acted well and will keep a close eye on it for another entry
Shorts: Day to mini
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
LO Reports 10/22. 117.15 good risk
APD 83.73 max risk.
TRIP Had its 2 day rally and gave it up today. Now, 33.15 good risk with recent lows 31.70
NSC Today's high max risk
EWZ Inside day. Today's high max risk.
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
AU Today's high max risk. Could be bear flag forming
Bye for Now!
