Distribution Day in Volume in 2 key indices SPY and QQQ. However, SPY held the 200 weekly moving average (IWM as well although closed the weakest) making it possible that that the market digested and tested support. After a decent US jobs report followed by a downgrade of Spain and Italy, the sell-off could have been far worse. However, China returns from a week off just when the US "celebrates" Columbus Day, a bank holiday. Chinese stocks and commodities prices continued declining. That will be an important component as we start the week. Earnings Season is also upon us.
Subs: All but IWM have positive pivots. Unless IWM clear R1 66.95, the others under S1 will fall to the midcap pressure. Otherwise, watch for the other indices to hold S1 and close above the pivots for a better sign of how the rest of the week might look.
SPY: 114.40 support, 116 pivotal, overhead resistance at the 50 DMA at 118.00.
DIA: Marginally hanging onto the 80 monthly with Friday's close but failed to clear the 50 DMA at 112.25. Subs-S1 110.16.
QQQ: Confirmed the recovery phase so best hope for continued move higher. 56.20 next resistance, 53.60 support to hold.
IWM: Bearish engulfing pattern with good volume and hovering on the 200 weekly moving average.Either midcaps will spoil the fun, or QQQ and leading stocks like AMZN will pull them along for the ride up.
ETFs:
GLD 155 still the bottom of recent range, but unless it clears 161, 147 seems more likely. Subs-pivots negative at 159.66
SLV Beneath Friday's low, will be a compelling short looking for 20.00 considering the gap lower September 23rd, the recent trading within the island and price below all the work from May to Mid-September.
XLK (Technology) Like QQQ, confirmed recovery phase. Provided it holds 24.00 could see top of recent range 25.29 next.
SMH (Semiconductors) Also in recovery phase. As long as 28.00 holds, watch the technology sector to lead.
IBB (Biotechnology) Inside day Friday and another one in recovery phase. 94.00 magic number. The 200 DMA at 99.50.
XLE (Energy) Held the 80 month not the 200 weekly moving average. 60.00 now pivotal. Subs-Positive pivots at 61.10.
OIH Managed to hang in there closing above the adaptive moving average. Longer trend weaker than XLE since still far from the 80 monthly and 200 weekly MA. If market rolls over, this is where I would look to short, DUG ultrashort. Subs-negative pivots at 109.72. R1 111.75
TLT ** (The 20 year Treasuries) An important component since now has had 4 down days after testing the 2008 high and failing on light volume. Held the adaptive moving average 116.50. Through 119.25, long term bullish trend returns.
XLF (Financial) Held 11.80. Another area to look at for short if market rolls over.
XRT (Retail) Sort of a wildcard given the double bottom from August lows yet the resistance at the 200 DMA.
Longs: Incredible divergence or tug-of-war between commodities and blue chips. (AMZN featured Thursday Evening). Stick with the stronger sectors for swing trades, otherwise, when you get a 1-3 day rally, until next trend emerges, good time to lighten and/or take profits. Picks all have positive pivots and crossed the 200 weekly and 80 month moving averages. My major focus will continue to be on the indexes and ETFs so keeping the number of featured picks down for now to minimize risk. Earnings season: Have dates listed below so please note your calendar.
ORLY (Oct 26) Since it touched the 50 DMA and bounced, it has been in a relatively tight range. The long signal was last Wednesday on an OR reversal at 65.80 which is still in play for swing traders. But now, 67.00 is good tight support since it cleared the 10 DMA at 67.50, appears to be developing a bull flag on the daily and has positive pivots at 67.69. Overhead resistance at 70.50 with recent high 72.00.Day to Mini.
ANF (Nov 16) Never went into a death cross and closed on the 50 DMA at 64.63 with positive pivots at 64.68. Max risk 63.35 under S1 and the 200 DMA. This already crossed R1 so unless S1 fails, looking for an OR reversal or breakout with first target 70.00 and possible one at 80.00. Day to swing
UNP (Oct 20) Inside day with positive pivots at 88.92. Must not fail S1 87.79. Not a lot of time until earnings, but could see a pop to 96.00 the 200 DMA. Day to mini
Honorable Mention: OR Reversal DECK (Oct 28) AMZN KMB (Oct 24 earnings) CL (Oct 27)CELG (negative pivots must clear R1 and Fri high 63.83 Oct 27 earnings) RAI (Oct 20) IBM (Oct 17))Others: CMI (Oct 25) PAY TPX (Oct 17)
Shorts: Note earnings.
OPEN (Reports Nov 1) Negative pivots at 47.68 and since crossed R1 must now also break 45.52 to stay short. Risk 49.00 if sell strength. Day to mini
GS (Oct 18) Not yet oversold. Negative pivots at 94.34 R1 96.44 which must not clear. Could see recent lows 84.27. Day to mini
NFLX (Oct 24) Not yet oversold. Negative pivots at 119.48 R1 121.95 which must not clear. Could see recent lows 107.63 or lower to the 200 weekly moving average 95.00. Day to mini
Honorable Mention: OR high failures against negative pivots; BTU IDCC (Oct 24) CMG (Oct 24) CF(Nov 1) DUG: Through R1 37.40
Have a great Sunday!