The telling sign Wednesday was that although S & P 500 and DOW took out previous day highs, NASDAQ and Russell 2000 did not. In this treacherous market, all indexes in alignment is the best scenario and anything other than that, is one for the daytraders and the nimble. So, when we finally see everything firm at once-along with the key sectors and groups-with volume, there will be something to cheer about. Another indication will be the bonds-as long as the TLTs go up, the risk on will keep trading volatile and uncertain.
S&P 500 (SPY) Distribution day in volume with back to an unconfirmed distribution phase as the 200 DMA is within sight but at this point, ephemeral. FED speak Thursday. Continue to watch the 200 DMA and if more selling comes in, support at 135. Subs: Pivots Negative. Must clear today's high, along with the other indexes
Russell 2000 (IWM) Never crossed previous day hi and now getting oversold making the short side risky. If this gets back over 80 would go long but ultimately has to cross the 200 DMA to stick. Subs: Pivots Negative. 65-weekly moving average 77.57
Dow (DIA) Friday low still in place meaning that a move above today's high would be relief. Otherwise, oversold with next support 125.50 area.
NASDAQ 100 (QQQ) Ridiculously oversold weekly RSI. 62.15 good support. AAPL could be basing now. Subs: Pivots Negative. AAPL Weekly RSI remains very oversold. 555 has to clear which would also be a return over the 50% Fibonacci retracement area. Recent lows should hold.
ETFs:
GLD Stopped dead in its tracks at the 50 DMA keeping the weak warning phase intact. 166 remains pivotal
SLV Closed over the weekly moving average but not the 50 DMA. 31.00 big area to hold
XLF (Financials) Closed over Friday low 15.39 but, unless clears 15.67, likely to see the 200 DMA
IBB (Biotechnology) 131.60 to hold or quick trip back to test 129
SMH (Semiconductors) Long time readers know that I never want to stick around in a party that the semis do not come to. Until clears the 50 DMA, aside.
XRT (Retail) Holding the 200 DMA and one of the best looking groups. Has to close over 61.45. Otherwise, will have to visit the 200 DMA again.
IYT (Transportation) Thought this would be the next group to firm for a swing, but with the close under the50 DMA, more sideways looks to be in store Subs: Unconfirmed phase change to bearish.
IYR (Real Estate) Has to close back above the 200 DMA.
USO (US Oil Fund) Not oversold so a good place to look at for shorts (SCO)
XLE (Energy) Landed on the 65-weekly moving average. Now, has to get back over the 200 DMA to be a contender.
TBT (Ultrashort Lehman 20+ Year Treasuries) The bleed has to stop here as well.
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.
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:
ECL 5 days under pivots with a hammer candle. Oversold. Max risk today' s low and should first clear the FTP 69.45 and then today's high
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:
WHR Over today's high puts it back over the 10 DMA which corresponds with R1. Risk today's low
SWN Changed to condition 1. Big range expansion. Has to hold 34.60 the 50 DMA and clear today's high.
EXP 54.10 still point to clear but on a closing basis to stick.
MA An open above unchanged and still a contender for higher prices. Risk now 471
DVA Like to see it clear today's high and hold today's low-max risk
TFM Closed over the 10 DMA. R1 takes out recent highs. Risk 59.20 the 10 DMA
TRW If holds around 47.75, could still go up if market cooperates. Has to clear the 10 DMA on a closing basis.
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:
Phase Change UA Unconfirmed phase change to warning with a slingshot provided the 200 DMA holds. Also has to clear the 10 DMA 1.87. TSLA Unconfirmed accumulation phase. Has to hold 31.14 and clear 32.05 last week's high. LULU Reports 12/7. Confirmed warning phase. Has to hold the 200 DMA and clear69.82 on a closing basis. QCOM Has to clear 62.80 F Max risk 10.77 and over 11.12 takes out R1. DLR 61.91 has to hold for a continued move up. TXN Over 30.00 would follow NFLX 9 days sideways. has to clear the 200 DMA CRM Watch the 200 DMA 143.33
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
VFC Inside day. Cannot clear today's high at the 50 DMA. Needs to break S1.
COH Cannot clear 54.94. Under 52.77 could see 47.50
WLL Has to break the week low (today's low)
BWA Should not clear R1 and has to break 62.00
CLF Must stay under 36.57 the 10 DMA
JOY Cannot clear today's high and could see new leg down
CHKP Cannot clear the 10 DMA 44.64.
OVTI 2 inside days. Cannot clear 14.52 the 10 DMA
Bye for Now
