The Dow Jones ticks were like watching a tennis match between Venus and Serena William. We have this really cool indicator that lights up when a phase is changing. DIA flashed warning, bullish, warning, bullish, warning, finally ending with the bullish phase intact. Can't say the same for S&P 500 and Russell 2000 though. Both now in unconfirmed yet weak warning phases. And then there's NASDAQ, which entered its warning phase (also weak) last Tuesday, ending the week with oversold conditions. Big earnings coming up this week. Should shed some light.
S&P 500 (SPY) A must move over the 50 DMA (143.00) first hurdle. Second is 144.56, the fast moving average. Otherwise, if there is a confirmation of this warning phase, 141.65 is next stop.
Russell 2000 (IWM) 82.60 the 50 DMA to clear or we could be looking at the 200 DMA
Dow (DIA) The one bright spot remaining on the 50 DMA and closing above. IBM reports this week. Seems one should wait to see how that impacts the Dow.
NASDAQ 100 (QQQ) Oversold on the 2-day RSI. GOOG reports this week and AAPL on the 25th. Subs: AAPL R1 and Friday high line up.
ETFs:
GLD Began last week thinking double top at 174 in 2012. Then, there was the island bottom. No more. So, under 170 see this in defensive mode
XLF (Financials) 15.45 support as earnings get cranking
IBB (Biotechnology) 140 support
SMH (Semiconductors) Oh my poor, poor semis-they were the first ones out the door to go home and relieve the babysitter
XRT (Retail) On the 50 DMA. Would like to see it clear 62.90 for a sign of life
IYT (Transportation) Subs: Tried the 50 DMA and holding the channel. 88.60 big support to hold and if clears Friday high, looks good to the 200 DMA
IYR (Real Estate)Subs: 64.30 now resistance if the accelerating warning phase continues.
OIH (Oil Services) Boxed in a range over last 8 trading days-would follow the way that range breaks.
XLE (Energy) Leaving this be unless clear 73.35
REE (Rare Earth Element) Subs: Long at 4.72 for swing. Plan, sell ½ if breaks 4.52 the rest if breaks 4.39. Otherwise, hang on.
TBT (Ultrashort Lehman 20+ Year Treasuries) Low interest rates are signaling weak market and US dollar. Overall, not such a good scenario.
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:
GILD Reports 10/25. Like this on strength over 68.80
LEN Outperformed after 5 days of negative pivots. Friday low max risk and back over the 10 DMA would hold for swing
RAX outperformed after 5 days of negative pivots. 66.81 max risk. If clears and closes over the 10 DMA, hang out. Reports 11/5
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:
VFC Reports 10/23. A classic setup Friday, coming in with an inside day, then having a 5 minute OR breakout over the previous day high. Now, has to hold the 10 DMA
AMT Reports 10/31. Inside day. Improved to condition 1. 71.43 max risk
CRM Reports 11/15. DOJI Inside day. This is a buy on a 5 or 30 minute if it clears 154.98.
LMT Reports 10/24. 92.48 max support. 93.47 the 10 DMA to clear and hold
M Reports 11/7. Inside day. Like Friday low to hold.
MCK Reports 10/23. 88.50 max risk. Like to see 90.00 clear
PCL Reports 10/29. Improved to condition 3. Has to clear 43.00 and should hold 42.60
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:
BCR Reports 10/23. Way oversold and right on the 50 DMA. 100.90 max risk to see if this can get a miniswing trade bounce to 104.
Phase Change: NBL Reports 10/25. Correction to the 200 DMA max risk. KSS Reports 11/8. Inside, narrow range day over the 10 DMA with the 50 DMA above as resistance to watch. RHT Holding the 200 DMA with max risk 52.93. Like to see this clear the 10 DMA 54.70 XECInside day F Reports 10/25. Inside day. HLF 2 inside days. Reports 10/29. Friday low max risk
Shorts: Lots oversold
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
RIG Reports 10/29. 45.70 good tight risk. 44.58 some recent support. Under that, 43.00
PXP Reports 11/1. Under 36.32 takes out Thursday, Friday low. 36.80 good risk
EWZ 54.20 good risk. Under 53.57 breaks last week low
APA Reports 11/1. Friday high max risk
QLIK Reports 10/25. 21.85 good risk
ATI Reports 10/24. Inside day. Max risk Friday high. Under 30.60 could see 29.00
WPRT Reports 11/1. Inside day. Max risk is Friday high
Bye for Now!
