We are no strangers anymore to market swings of 100-300 points on any given day. The deterioration began when the indexes broke their 50 DMAs in the past 30 days. But, ahead of the election, SPY in particular tried its hand at testing it. The warning phases are exactly that-warnings. Now, Russell 2000, DOW and NASDAQ 100 are unconfirmed in distribution phases (need 2 days to confirm). That can accelerate to something worse or reverse back to warning. When indexes change phases, we like to go to a 2-prong plan. First, stock picking-my particular specialty (Touted several times by TA Stocks and Commodities Magazine-see the November issue with an exclusive interview they did with me) with the help of proprietary scanning software that is truly cutting edge. Second, sector rotation-especially balancing portfolios with both longs and shorts based on the individual ETFs and corresponding equities weighted in those sectors/groups.
S&P 500 (SPY) Big distribution day in volume. 138.23 the 200 DMA. Subs: Today's video goes into detail. 140-140.40 is resistance now. The 200 DMA support. Phase-weak warning. Market Internals: Negative
Russell 2000 (IWM) Unconfirmed distribution phase. 80.60 the 200 DMA now resistance unless it clears and closes back above it. Subs: We could watch for a slingshot if runs up, otherwise, that 200 DMA looms. The channel I showed on the video this week--today's low touches it
Dow (DIA) Unconfirmed distribution phase. 129.70 the 200 DMA now resistance unless it clears and closes back above it.
NASDAQ 100 (QQQ) AAPL held a 50% retracement of the Fibonacci sequence from 2012 low to high. Better to watch that then the index itself. Subs: Weekly RSI low.
ETFs:
GLD Looking to see if holds around 165.50 and does some consolidation before making any strong recommendation
XLF (Financials) Well, like I wrote, under 16 vulnerable. Entered an unconfirmed warning phase. Unless it comes back and closes above 15.80, likely to see the 200 DMA
IBB (Biotechnology) Got to the 200 DMA which I hope at least, was a signal for some of you to get out of longer term longs when I began to write that this sector was done for now (about a month ago). This would be a really great place for this to hold.
SMH (Semiconductors) Back to unconfirmed bear phase, but holding the fast moving average. Subs: Slingshot low still in place, but unless it gets back over the 50 DMA, aside
XRT (Retail) Unconfirmed weak warning phase. Held the fast moving average. Best one to watch for a sign of strength. Subs: 62.85 the 50 DMA
IYT (Transportation) Holds here, another place to look although sideways is the theme for this year. Subs: Eyes here too for any sign of strength
IYR (Real Estate) Strong warning phase but outperformed. If holds Wednesday low, and takes out the high, compelling. Subs: R1 and today's high line up.
USO (US Oil Fund) Subs: SCO Through 47.31
OIH (Oil Services) Subs: Not oversold
XLE (Energy). Held the 200 DMA. Over 71.00 helps otherwise, weak looking now
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: The picks relate to the video and the sectors/groups featured.
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:
EXP Has to clear 54.10 the slingshot high from 11/06, then close above to stick
JBHT Inside day. 58.32 the 10 DMA and today' high lines up with R1
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:
NOTE: Some have a negative stack of pivots but closed above-see that on a day like today more lack of overall interest.
AEM 56.35 is the 200 weekly moving average. Held the 10 DMA. Has to hold today's low and clear 57.00 to stick.
SLW Still want to see 39.40 to hold and take out 41 to stick
GPOR Range expansion with good close. Like to see it open above 34.05 to continue and hold 33.00
LEN Has to clear 39.25 and hold 38 the 10 DMA
Phase Change NFLX Inside day. 80 first hurdle, then the 200 DMA. SPG Featured on today's video. Looking for a possible bottom. Has to clear 156.43. A gap up would be real nice. 155.20 max risk CSTR had a slingshot which confirmed but closed under the 50 DMA. Like that today's high and R1 line up CRM Reports 11/20. Inside day. Has to hold today's low and clear R1 and today's high TXN Over 30.00 would follow MTH Slingshot on10/26. Like over 38.30 and R1 LULU Reports 12/7. Has to clear 72.35. BIDU working a slingshot pattern. Today's high and R1 line up
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
MDC Had a slingshot. Closed under the 50 DMA. Needs to break 36.63 and should not get over 38.50
BEAM 56.78 max risk
AMGN Has to stay below 86.80. Still working the brick wall at the highs
GS Brick wall. Landed on the 50 DMA. Can use 120.15 for tight risk
MJN Neutral pivots. Cannot clear 66.56 and should break 65.35 the 10 DMA
Bye for Now!
