My list of finding tops/bottoms not in order of importance per se: Price, candle patterns, channel formations, volume, alignment and slope of moving averages (phase and strength/weakness of phase) and a bit of fundamentals (although living in a technical bubble seems to be ok). Intraday, I use floor trader reference and pivot points, their stack and opening ranges. Simplified of course, but a good checklist to determine where the indexes and ETFs are right now.
So, where are they right now? None have changed phase or slope of moving averages. Some had bullish engulfing candle patterns, others not. All took out previous day high and after good volume (Accumulation) followed with less than average today. All are back over August lows. All but SPY back over the 200 weekly moving average. QQQ back above channel low. Fundamentally, some positive news with jobless claims, manufacturing, still gloomy picture overseas.
Is this a bottom? Conclusion: Temporary bottom at best. We have earnings season upon us. Unemployment number Friday. No real change yet in phase or volume and an August low in place. Lots of room to go lower and look like digestion above recent lows and lots of room to go higher and test longer term resistance. Sound hard? Great opportunities for day and miniswing traders, some low risk possibilities for swing traders (today was a good entry day), but real dicey for buy and hold folks right now. In short, you better have a set of rules and discipline to follow.
Subs: All FTP positive stack which means, provided pivots hold can look to buy dips with QQQ still in best shape SPY in worst shape.
ETFs:
GLD Inside day. Range 155-162 breaks. Subs-over today's high can use the positive pivots at 158.70 as risk, but still waiting for range to break longer term. Conversely, with the 50 DMA declining, under today's low is a potential short with the 160 EMA at 155 support at bottom of recent range.
XLK (Technology) Rallied to and closed beneath 24.00 the adaptive moving average. Provided 23.50 holds could take out adaptive and go to top of recent range 25.29
SMH (Semiconductors) 28.00 the 50 DMA, over that looking again at 30.00. Chart looks promising and best one to watch for a real trend change and not just a good bear rally. Must hold 27.25
IBB (Biotechnology) Rallied back over 93.50. The 50 DMA 94.25. Another one as big determinant on next major move and only one that on last run, tested the 200 DMA at 99.50.
XLE (Energy) Great follow through after bullish engulfing pattern with spike in volume. 60.00 now pivotal, 62.00 next resistance.
TLT (The 20 year Treasuries) At this point, under 120.00 looks more like a top and failure of 2008 and 2011 high. Subs-Bought TBT and exited when failed R1. Provided it holds 18.90 with positive stack of pivots will look at it freshly.
IYR (Real Estate) Lagged but has potential to see 60.00 provided recent lows hold.
XLF (Financial) Back inside a descending channel. If recent lows hold, could take a trip to 12.50.
Longs: Exited XLK calls except for a tail as planned. F calls holding well. Some of you bought recommended picks for swing trades. Classically that means 2 ATRs before a no loss stop in place, but perfectly ok to trail up stops until overall market phase is clearer. With many longs triggered today (JOYG VMW etc), list now more difficult since risk control for swing super big.
KMB Not new to the list. Underperformed today and good risk to under S1 69.87 in a Condition 2. Pivots positive at 70.40. Provided S1 holds, can look at weakness or strength seeing as it also needs to clear R1 70.90. Last week's high 71.78 which if clears can see a move to 2007 high 72.79 and possibly beyond. Day to swing
CAT Yesterday it touched the 80 monthly and 200 weekly moving average. Ran to R1 today but did not close above on a 30 min bar. Positive pivots at 73.44 and risk to under the moving averages, way too much so for swing. Must use today's low 71.49. R1 is 75.40 which also lines up with today's high. If clears with OR breakout, another closer risk option is the FTP. Overhead resistance at 80.00 then 85.00. Day to mini
ROK Needs to clear 50 DMA and 60.00 then best risk 58.00 for mini. Swing risk the 200 monthly 56.50 level. Positive pivots at 58.94 making it candidate for OR reversal. Day to swing
OXY Over the 80 monthly moving average, not the 200 weekly. Today's low is good risk 74.00 and with positive pivots at 75.27, since cleared R1 but not the OR high, could see pop first to 78.50 (the 200 weekly MA) then the 50 DMA at 83.20. Swing risk way too much. Day to mini
TIF Held August low and still in a long term positive phase. Had a narrow range, positive pivots at 62.10 with most manageable risk today's low or max, under 60.00. Since pivots positive candidate for reversal. Tried but could not clear R1 now at 63.31, which it must close above to stay with it. Resistance at 67.50 the 200 DMA. Day to mini
Honorable Mention: ORLY RAI both had OR reversals and held for longs. But, both underperformed the market so with positive pivots still in play (also still candidates for swing). OR Reversal Now Condition 1 CL CELG IBM DECK DLTR Others: PANL AMZN UA
Shorts: With stocks under the 200 DMA and today's momentum shift, would like to see 2-3 days over the pivots and then a failure of S1 before new entries. When and if the market turns, will be plentiful. For now, not fighting momentum.
WAG Shorted and covered. But, as described above now 2 days over the FTP which means under S1 32.66 could resume move down, especially since it never cleared R1 now at 33.30. Day to swing
CRM Inside day so must break today's low. Then not clear the positively stacked FTP at 116.10. Held August low why not going to recommend bigger risk. Will be beautiful short if market doesn't hold. Day to mini
Honorable Mention: GS similar to WAG, must break S1 and today's low and not clear R1 96.27
Goodnight!