Friday could be the classic close that cleared the recent congestion in SPY with a fourth accumulation day in volume under its belt over the last 2 weeks. Cleared the 80 monthly and 160 Exponential moving averages. That makes 121.30 key support, 126.80 the next hurdle at the 50 DMA and then 127.60, the 200 DMA or the mother of a phase change from recovery to accumulation.
QQQ has had good volume patterns but Friday, the pattern was rather insignificant. The high of the recent range to clear is 58.29. Support area 56.30-80. Naturally, the leading stocks have to stay in the game.
IWM was weaker than the others still under the 70 EMA yet hovering. A close over 71.34 would look good, in addition to some volume on the ride. Now, 69.80 support.
It is essential to look at the market top down and consider the individual sector/groups as we face either an "all for one" continuation, or more divergence making traders less confident. The market internals remain overbought, but the price/volume/slope/phase positive. After a 15-20% move off the lows, market digestion has been quick. Nasdaq and technology made the move first and now have paused. Energy and other commodities rallied into resistance. Financials and Regional banks similar. Midcaps are at the "make it or break it" point.
ETFs:
XLK* (Technology) After confirming the phase change from Accumulation to Recovery, Friday it closed with a doji day right on the pivotal 25.50 level. Key area to watch for next direction with divergence in its top holdings (AAPL near oversold, ORCL near overbought.) Subs-GOOG MSFT 2 in this group to watch)
SMH (Semiconductors) 31.70 clears the 50 weekly and 200 daily moving averages. 30.00 key support
IBB (Biotechnology) Through 97.90 clears the 50 weekly MA. Range bound as this group approaches overbought. Under 94.50 trouble.
IYT (Transportation) Rallied right up to the August 31st high.
XLF (Financials) Cleared 13.05 the 70 EMA. More hurdles to come like 13.50 high of last 2 months. 12.45 key support
OIH* (Oil Service Holders) After taking out the weekly high on Friday, closed beneath, somewhat disappointing since it could not clear the 50 DMA. An area to watch should market sell off for possible short, especially under 117.00.
XLE (Energy) The 160 EMA next resistance 68.75.
XRT (Retail) Sure looked like a bottom and very much a leader on this move. Still could see big move to 58.00 but now approaching overbought.
KRE (Regional Banks) Strong move off of lows, but overbought on weekly/Daily RSI.
TBT (Ultrashort Treasury Bonds) Approaching overbought before it has a chance to clear the 50 DMA overhead at 22.30. An important component along with TLT to watch.
Longs: I have liked the shorter list since we can focus on indexes, ETFs and a few picks. I was traveling Friday, but hope some of you caught the OR reversal in SPY on your own.
WLT (Nov 2) Four days of consolidation with higher lows. 77.93 last week's high with S1 73.33 a good point to buy a dip against considering the pivots at 74.66 are positive. One of the few that has not crossed R1 now at 76.28. 72.00 is the 10 DMA ultimate support with 82.00-84.00 a reasonable target although 110 is possible. Day to swing
MA (Nov 2) Not overbought. Positive pivots at 331.20 with the possibility if clears 345 a trip to 358. Like all longs now, prefer to buy the reversal especially if has already cleared R1. Day to mini
MRX (Nov 8) Bullish Engulfing pattern, held the 50 and above the 10 DMA. Near all time highs. Not overbought. Pivots positive 37.54 good risk under 36.45. A 10.00 move possible. Day to Swing
PANL (Oct 31) If holds 47.20 the 50 DMA still has potential to 59.00. Positive pivots at 48.52. Day to mini
MSFT A decent buy and hold if willing to risk to under 25.90. Not a big ATR so for swing traders only. Could go to test 32.00 and if that breaks, in a good market, has potential for 40.00 over time. 27.05 the positive pivots. Mini to Swing
Honorable Mention: RHT* GOOG* PCP HLF all rallied Friday. All are candidates for OR reversals. (NTES as long as it stays above 44.45) If in a position in any recent picks, please check with me for the trailing stops. Many swings especially in ETFs or indexes have clear moving average lines in the sand. Lots of earnings this week on recent picks like FSLR and X. FSLR has to clear 56.65 now. X, through 23.80 then the 50 DMA.
Shorts:
ARMH Inside day with positive pivots but under the 200 DMA. Could not clear R1 now at 27.33. If breaks 26.40 the 50 DMA and 160 EMA. Then can see 20.00. Day to mini
SLB Pivots neutral at 67.74 with overhead at 70.34 the 200 weekly moving average. Did not clear R1 now at 68.88. Once breaks 66.19 S1, could see 50.00. Day to Swing
HAL A close under 33.00 is a failure of the 80 monthly and 200 weekly MA. Traded above R1 but closed under S1 with negative pivots at 33.97. Should not clear 34.95. Could see 27.50 then 15.00. Day to swing
SINA Must stay under 85.73 R1 to see a move back down to 65.00. Day to mini
Honorable Mention: MCP (Nov 10) Has to break 36.90 and not clear 39.05 TAP (eyes still on) BLK(should not clear 153.90)
Have a great Sunday!
