As expected, a slow, low volume day with NASDAQ and Russell 2000 declining beneath the fast moving averages, while S&P 500 and Dow Jones, hold steady above. NASDAQ tested and held the 50 DMA which means the leaders will be the compelling ones to watch-especially AAPL which is now beginning to enter oversold territory.
S&P 500 (SPY) 144.80 is an area to hold or concerns will arise. A move above 146 should be received well Subs: Pivots negative
Russell 2000 (IWM) I always like to look here for clues. It seems most logical to follow the way today's range breaks up or down since both the high and low are significant chart points Subs: Pivots negative, held S1
Dow (DIA) Subs: Held the trendline which means another one to watch which way today's range breaks
NASDAQ 100 (QQQ) The 50 DMA and today's low line up. It's a make it or break it with a move above today's high reason for relief. Subs: Pivots Negative
ETFs:
GLD Now a 2-day correction since the new highs were made. If this is to continue higher, would expect an up day Tuesday Subs: R1 and today's high line up
XLF (Financials) Held 16.00 which is positive. Underneath there is also 15.77 support. Subs: back over 16.09 looks good
XRT (Retail) Subs: Got positive pivots
IYT (Transportation) Subs: Pivots negative although closed above. Bumping up against the 50 DMA
IYR (Real Estate) Subs: Will try once again if can clear today's high and R1 which line up
USO (US Oil Fund) 2 inside days
OIH (Oil Services) If continues to hold 39.00 will watch for a return move over the 200 DMA
XLE (Energy) I would be friendly to this over 73.95
REE (Rare Earth Element) Subs: Now that this is trading between the 200 and 50 DMAs, the middle is nowhere land and have to wait for a clearer setup
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs held the 200 DMA and have resistance at 122.57
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.
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:
AMZN Reports 10/25. 255 good risk. Over R1 clears today's high
BKD 23.65 max risk. Reports 11/01. Also had narrow range day
CRM Today's low max risk and like to see it clear 154.25 first
LULU 74.70 the 10 DMA and max risk.
SWN Reports 11/01. 34.90 max risk and over 36.00 should stay strong
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:
GILD Reports 10/25. Today's low good risk an over last weeks high should be strong
NBL Reports 10/25. Never doubt the power of 2 inside days. Now a condition change but still in accumulation. Look for 93.70 area to hold
TROW Improved condition. Inside day. 63.24 max risk
AXP Like 58.65 area to hold. Bullish engulfing pattern
EQT Like to see 60.50 clear R1
RRC Improved to condition 1. 69.40 good midpoint risk
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
PXD Reports 10/31. Not quite oversold, but tested the 50 DMA which makes today's low max risk.
Phase Change: ENR Has to hold today's low INTC Still holding the low from last week and today's high lines up with R1 F If can clear 10.13, then today's low becomes a good risk WLP 2 inside days.
Shorts: Day to mini
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BIDU Today's high max risk. Needs to break S1
CMI Reports 10/30. Today's high max risk. Under 90 could see good miniswing trade
BA Inside day. Really needs to break 70, the 10 DMA to continue south
LO Reports 10/22. OR high failure preferred
NUS Inside day. Today's high max risk and under today's low and S1 could see move to 40.10
CAT support 84.35 then 82 which have to break or could see some buying come in
URI Today's high max risk
Bye for Now!
