The gap and follow through today put all 4 major indexes over their 10-day moving averages, but also into significant daily resistance levels. DIA and QQQ had accumulation days, but volume was not impressive. After the move up of the last two days in this market I'd be surprised to see a large uptrend day tomorrow. Subs: Pivots are all positive.
S&P 500 (SPY) Look for resistance at 154.88 and 146.34. There should be support at 145.00 and 144.66.
Russell 2000 (IWM) This one is still slow to get moving and needs to clear 83.44. Then expect resistance at 83.90. On the down side, it's important that it holds over the high of yesterday, 82.64.
Dow (DIA) 135.85 is significant resistance and a good place to look out for a high if it moves up tomorrow. Look for support at 134.76 and 134.57.
NASDAQ 100 (QQQ) The strongest of the 4 major indexes today, but it's very closely following AAPL which had a good day. It's over the 10 DMA but still under the 50 DMA at 68.38. Expect resistance at 68.38 and the 68.70 area.
ETF's
GLD Under 170 in defensive mode unless can get back above.
XLF (Financials) The last couple weeks has been a sloppy, but healthy consolidation. If 16 should be support and could be used as a stop for positions.
IBB (Biotechnology) Needs more time to consolidate for a solid move higher. 145.20 area will likely be strong resistance.
SMH (Semiconductors) INTC is down after its earnings report. This area of tech is not worth too much attention right now.
XRT (Retail) If it moves higher it is worth following, but if it moves below the 50 DMA again it would be a very negative sign.
IYT (Transportation) This has been stuck between 86 and 96 all year. I'd avoid trading it.
OIH (Oil Services) Broke out of the daily range on good volume. Watch the 50 DMA above at 40.79. For support look at 40.13.
XLE (Energy) Nice strong day today. 74.50 is the next big area to clear. Look for support at 73.60 area.
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 along with a fudge factor and time confirm. I suggest you decide on 1 or 2 that have a risk you like and then position size accordingly.
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:
N/A
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:
N/A
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:
EQT Reports 10/25. Inside day so must clear 60.64.
FLS Reports 10/29. Very compressed daily on the 50 DMA. I'd wait for it to clear 130.43. Should hold 129.
WHR Reports 10/23. Must hold 84.54. Still in consolidation area that breaks out at 85.40.
REGN Reports 10/24. Nice range breakout today but light volume. 156 is a good areas to look for a reversal. Max Risk 155.
SHOO Reports 10/30. Today's high 43.18 is a key resistance level. Breakout would look good. So would a reversal around 43.40.
ULTA Reports 11/29. Big volume reversal. 97.54 and 96.00 are good support. Breakout over 98.18 is also interesting.
XOP Sloppy consolidation for the last month breaks out at 56.74. Must clear that level.
CRM Reports 11/20. Sitting right above a tight 3 day consolidation. Must break 155.67.
EOG Reports 11/5. Nice volume change of phase. Look for reversal over 112.30.
VMC Reports 11/1. Back over the 10 DMA. Should hold 47. Be careful about light volume.
LULU Reports 11/29. Back over the 10 DMA on light volume, but had a good volume run in the final hour into the close. 75 should be good support.
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:
N/A
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
N/A
Others:
DECK Reports 10/2. Inside day. Must be below 36.30.
MOS Reported. Must be below 54.38
TJX Reports 11/13. Must be below 43.20
VLO Reports 10/30. Must be below 29.20
Best wishes for your trading,
Geoff Bysshe
President
Filling in for...
Michele Schneider
