Low volume but positive end to a week that took the market out of the doldrums and into new 4 -year high territory. Other than the typical market corrections and digestions that occur, barring any unforeseen disasters, this rally has set the tone for the coming weeks and months. The only concern is that nobody has asked me if this is the top yet. That is a question I typically get on large rallies. To quote Rodney Dangerfield in Caddyshack-"They're all buying? Then sell, sell, sell!" I jest of course. But, seriously advise you to let the market tell you.
S&P 500 (SPY) 145 interim resistance and 143.09 then 142.21 interim support.
Russell 2000 (IWM) 84.66 2012 high. Other than overbought conditions, seems like just a number right now.
Dow (DIA) Still has to make good over the 2012 high 133.14 made in May. Otherwise, support at Friday's low to hold.
NASDAQ 100 (QQQ) The high Thursday and Friday was 69.55 with NASDAQ ending the week with an inside day. 68.50 now support.
ETFs:
GLD Acted like QE3 is around the corner. Nosebleed RSIs now. Unless the FED actually does do something, my sensibility is that an inflated gold price is not a great sign to sustain confidence in the market.
XLF (Financials)16.01 is the 2012 high. Seems strange to have this and gold trading in tandem. Is that just me? 15.38 now the number to hold
IBB (Biotechnology) No sign of bursting bubble as of now.
SMH (Semiconductors) Inside and narrow range day. Above the 200 DMA-that's good. Semiconductors are still a huge potential growth area over the next several years. The monthly chart reflects a decade long of basing action.
XRT (Retail) Ended on new year highs.
IYT (Transportation) You know I always welcome semis and this group to the party-the one that goes on all night. Gorgeous wedge in place since March peak. Subs: A really nice trendline on the weekly chart I would like to share with you in Monday's video.
IYR (Real Estate) 72.59 is the 2008 high before the bubble burst. Looks like where this is heading to
USO (US Oil Fund) Oil has remained under the 200 DMA since May. Would like to see it stay beneath.
OIH (Oil Services) 41.75 recent high to clear. 40.45 the fast moving average support.
XLE (Energy) Cleared everything from April. 73.00 now support. 76.50 the 2012 high
TBT (Ultrashort Lehman 20+ Year Treasuries) I am equally perplexed how the rates could be off the lows while the US dollar drops. On the lookout for which trend is accurate.
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: Not recommending any new longs with RSI over 92.00.
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:
PCYC 3 days under pivots. Ideally should cross Friday high to continue and return to a condition 1. Has to hold 64.50 to consider a trade
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:
IOC Improved to condition 1. 78.46 good risk. 85.25 next area of resistance.
PXP Improved to condition 1. Like to see Friday low hold. Through 40.70, can see 44.00 next overhead resistance.
AXP Improved back to condition 1. Has to hold Friday low. Like to see R1 58.02 clear.
Z Inside day. Slightly positive pivots so has to clear Friday high with Friday low max risk. 2012 high 44.23. The 2011 high when the IPO occurred was 60.00
SLG Needs a close over 82.32 and a hold of 82.00. Like reversal or breakout
MPC A gap higher would be one to follow. Otherwise, 50.44 the 10 DMA to hold
KSU Closed on new highs for 2012. A miniswing at best from here
ONXX 79.20 is 2012 high. 77.30 should hold
Phase Change: CTSH Unconfirmed phase change to Accumulation.66.27 the 200 DMA to hold. Has a gap to 69.50 to fill SNDK confirmed phase change to accumulation provided 43.00 holds. TIF Unconfirmed phase change to Accumulation provided 62.36 holds. Through 63.00 has gap to fill at 65.50. CHRW Confirmed to recovery and back over the 80 monthly moving average. 56.65 max risk. Inside day; through Friday high looks good for swing. BWA No phase change but on alert with range expansion against the 200 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
AAP Cannot clear Friday high. 2012 low is 60.00 should this continue to weaken.
CSTR Bearish phase confirmed. Should not clear 52.60. Under Friday low breaks the 10 DMA
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
NTES 49.65 has to break and risk is Friday high.
Bye for Now!