Looking at last week, the market closed higher clearing the fast moving averages, which is what we looked for as the week began. On an intraday basis, choppy, thin and what sometimes seems like manipulated trading prevailed. This is a step back, take a stance, know your risk and ignore the noise in between environment. The market is in a bull phase with pockets of weakness. But, the sectors that matter to move an economy forward-real estate, homebuilders, financials, transportation, retail andsemiconductors, all also closed higher. Plus, the final 2 days of the week brought in decent volume. Looking ahead:
S&P 500 (SPY) Except for some midday selling, this held up well. 144.80 is an area to hold or concerns will arise. Subs: Pivots positive, held S1
Russell 2000 (IWM) Although this could not sustain over 84.65, it did manage to close over the fast moving average which is better than how began the week. That will be the level to keep watching Subs: Pivots positive, held S1
Dow (DIA)Subs: It closed above the trendline, however, unless already long coming into Friday, there was no good buy opportunity. Now, will look for one as the week begins
NASDAQ 100 (QQQ) Friday low will be important as the week begins. Subs: Pivots Negative with 69.60 important level to close above
ETFs:
GLD After Thursday's new high close for the year, Friday seemed like a disappointment. But this too closed above the fast moving average.
XLF (Financials) Held 16.00 which is positive
IBB (Biotechnology)Subs: A couple of brick walls or glass ceilings to note-ALXN AMGN (inside day)
SMH (Semiconductors) Hammer candle close at the level it needs to clear, 32.00
XRT (Retail) Like everything on Friday, had a great open, worked its way lower, but still looks darn good
IYT (Transportation) Subs: Touched the 50 DMA so perhaps need to wait to see if can hold 89.00 before jumping in
IYR (Real Estate) Inside day which is interesting Subs: DOJI and right beneath the channel line. Not giving up on this unless it breaks Friday low
USO (US Oil Fund) Inside day
OIH (Oil Services) Changed phases 3 times last week-definitely coiling to do something big-and right now, that could be either way up or down, although down seems more likely
REE (Rare Earth Element) Subs: Popped to the 10 DMA Friday. Still looking to buy a dip to 4.50 level
TBT (Ultrashort Lehman 20+ Year Treasuries)Reverse split changed prices. Watch what TLTs do at the 200 DMA
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: Takes ironclad discipline to stay with swing trades when market moves around so much intraday.
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:
BKD 24.00 a good risk
GILD Reports 10/25. 68.00 max risk but 69.00 a good closer one
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:
TROW Improved condition. 63.22 max risk
MCK Reports 10/23. Inside day. 88.94 good risk
AXP Like Friday low max risk.
LYB Reports 10/26 Inside day. 51.95 max risk
EQT Improved to condition 1. 59.37 max risk.
AGU Max risk 10 DMA and S1 103.43
ETN Reports 10/22. Improved to condition 3. Friday low max risk
TDC Return to condition 1 and phase change. Max risk Friday low
Phase Change: ENR I bought this Friday but did not hold on even though it held the 200 DMA.Over 75.00 looks good. INTCProvided it holds 22.50 still eyes on NBL 2Inside day. Max risk the 200 DMA BWA Unconfirmed accumulation phase with Friday low max risk.
Shorts: Day to mini
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CXO Under the 50 DMA continues to look vulnerable
WLL Under Friday low breaks the 50 DMA with risk 46.25
WPRT 31.50 now good risk to see 28.50
CAT Friday high max risk with support 84.35 then 82
WLT Inside day. Like to see it stay below the pivots. Support at 31.00 then 30.00
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day's lows
NUS Right to the 50 DMA resistance which means 42.94 max risk
CLF Narrowest range in 25 days. Has to break under last week's low to see move to 36.00 or lower
Bye for Now!
