Nagging 4th distribution day in volume ending the month in NASDAQ 100 and S&P 500. That looks to be saying the market wants lower after the Thursday bounce that could not reach the fast moving averages. But, QQQ and IWM had inside days, so flexibility dictates to follow the way the range breaks. Watch for which moving average the market is attracted to-the 50 DMA below or the fast moving average above.
S&P 500 (SPY)Subs: Friday high lines up with R1 and the low lines up with S1. Since pivots negative in all indexes, don't be afraid to trade the break up or down. In the middle, stay aside.
Russell 2000 (IWM) Inside day. Subs: 50 DMA 81.50. Fast moving average 84.72.
Dow (DIA) 133.00 to 135.00 a range that would trade a break of one way or another
NASDAQ 100 (QQQ) Inside day. Subs: 50 DMA 67.50. Fast moving average 69.60
ETFs:
GLD Inside day. Following range break up of down makes sense
XLF (Financials) 15.20 is the 50 DMA which right now seems like this group is attracted to in particular.
IBB (Biotechnology) Yet another strong close for the month.
SMH (Semiconductors) Inside day.Subs: Would not be my first choice to short, but would be to watch if clear 32.10
XRT (Retail) Also seems to want to visit the 50 DMA unless clears and closes above 63.00
IYT (Transportation) Subs: Looks a little like Humpty Dumpty. For those of you unfamiliar with the nursery rhyme, HD had a great fall. What could put this together again is a move over 89
IYR (Real Estate)Subs: Over Friday's high especially on a closing basis, and this will look a lot better. Took charge in 2012-now will see if can have an equally take charge 4th quarter
USO (US Oil Fund) DOJI and outperformed the market even it its current bear phase
OIH (Oil Services) Never cleared the monthly moving average which means longer term trend negative until otherwise
REE (Rare Earth Element) Subs: Inside day. Has to clear 5.04
TBT (Ultrashort Lehman 20+ Year Treasuries)confirmed recovery phase but with lots of overhead resistance
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: Reducing the picks until market clears range one way or another
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy a opening range breakout orcandidate 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:
HFC Although there is a slingshot high to clear at42.17, if holds Friday low, worth a shot to see if can clear since weekly and monthly charts look good
FIO Inside day. 10 DMA max risk 29.95. Over Friday high looks good
AEM 51.35 should hold now. Close over the 80 monthly moving average, first time since a year ago exactly.
V Improved to condition 3 with Friday low max risk.
ONXX Inside day. Friday low good risk. Through 86 could see 95
SHW Inside day. 148 good tight risk. 154 a reasonable target
ROSE Better than average volume and return to the 10 DMA. Friday low max risk. Over 50.00 looks good to 56.00
GNC Big volume day and unconfirmed phase change to bullish. Like to see 38.25 hold on a closing basis. Could see a digestion day.
Phase Change: VMW confirmed phase change to accumulation provided Friday low holds. Had inside day so would follow over Friday's high ROST had a glass ceiling high back on 8/20. Now, has a glass ceiling low with good volume provided confirmation. I also would keep risk tight to pivots if opens higher INFY Unconfirmed accumulation phase change. Needs second close over 48.46 and to clear 49.00
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NFLX 56.20 max risk. 54.16 to break as Friday inside day.
BA Cannot clear 70.00 and should break 69.00
PCLN Max risk 626.15. Under 617, 600 looks like next support
MJN 73.90 good risk. 68 next best support
FDX 85.68 max risk. Under 83.80 next support 78-76.00
Bye for Now!
