Well, perhaps the Rodney Dangerfield quote was timelier than I even imagined! After testing the last swing high in S&P 500 from 2008 before the huge downturn, the late day selloff could have a short-term impact, which means, a correction in what remains a solid bullish phase. Question is always how big a correction? The first obvious place to look is at the nearest moving averages. For us, it's the fast or 10 day moving averages in all indexes. Next place is the volume-so far, the accumulation days outnumber the distribution days. Monday's volume was light. A major concern is the number or new 60-day highs that were made and consequently, how many of them closed on their intraday lows.
S&P 500 (SPY) 142.00 is the fast moving average. Subs: Pivots now negative in all indexes-first time that has happened in a while. That means until they clear R1, keep trading from long side to a minimum.
Russell 2000 (IWM) A tell-tale sign was that this could not get above 84.66, the 2012 high from March. 82.20 is the fast moving average support to watch
Dow (DIA) Monday high took out 133.14 high made in May by 2 ticks. Then, the last ½ hour, this sold off hard. 131.25 is the fast moving average
NASDAQ 100 (QQQ) The bigger they are the harder they fall. This is on the fast moving average after new decade highs. 68.42 is the low from last Thursday. If that breaks, 67.50 is last week's low.
ETFs:
GLD Has a gap to fill to 165.78 from last Thursday. Better support 163.75 is the fast moving average.
XLF (Financials) Correction begins with 15.26 the fast moving average to watch.
IBB (Biotechnology) 137.80 the fast moving average. This has been a year of new highs, pause, correction, then resumption of the rally. A while back I wrote that each month in 2012 saw a higher close. It will be when that reverses we can begin to say a more serious correction is in store.
SMH (Semiconductors) Broke the 200 DMA and now looks like the 50 DMA at 32.26 is the next area to watch.
XRT (Retail) After new yearly highs, closed on the intraday lows. Subs: On slingshot watch with 61.95 the 10 DMA as lower level support.
IYT (Transportation) Although stronger on Monday, tested and could not close above the 200 DMA. Subs:Positive pivots
IYR (Real Estate) 65.80 is the fast moving average
USO (US Oil Fund) Inside day with sideways action. Under 35.00 and over 36.70 breaks the recent range one way or another
OIH (Oil Services) 41.75 recent high to clear. 40.45 the fast moving average
XLE (Energy) Subs: New 60-day high and close on the lows which means on slingshot alert with 71.85 the 10 DMA
TBT (Ultrashort Lehman 20+ Year Treasuries) Subs: Still has positive pivots
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:
MDVN Pullback to the 10 DMA provided 102.75 holds. 104.36 is the FTP to cross then R1 105.32
FIRE 54.00 the 10 DMA support. Like to see it clear the pivots then today's high. Right now, last week's high is resistance
DVA As long as 97.95 holds, it clears 98.97 the FTP ad the today's high
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 4 days under pivots. Ideally should cross today's high to continue now that it has had an inside day. Has to hold 63.71 Friday low.
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:
WFM 97.10 is the 10 DMA to hold. Really like to see this clear recent congestion over 98.00
UA Inside day. 58.11 the 10 DMA to hold. Looks like it has room to 61.70 and above.
UNP Improved in condition but not a condition 1 since the 10 DMA still negatively sloped. 122.00 is a good risk if. Like to see 123.50 area clear
SHW Inside day. Today's low max risk. Over 144.50 begins to clear recent congestion
DO 2 Inside days. 66.74 max risk and over 68.00 has room to 70.60 the 80 monthly moving average.
Phase Change: CTSH confirmed phase change to Accumulation.66.27 the 200 DMA to hold. Has a gap to 69.50 to fill. Positive Pivots but also had a possible slingshot so today's high is important TIFconfirmed phase change to Accumulation provided 62.30 holds. Positive Pivots CHRW 56.65 max risk. Positive Pivots. Would like to see 57.45 clear. BWA No phase change but on alert with an inside day. 72.88 the 200 DMA has to clear
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
TSLA Big reversal today. 28.68 is resistance and 26.74 recent support
HUM Gave up 3 days of gains-like to see an OR high failure with 71.66 a good risk
PCLN Tweeted this short under 615. Now, back to an unconfirmed distribution phase and good to watch for an OR high failure against R1.
AAP Cannot clear 70.50. 2012 low is 60.00 should this continue to weaken.
NTES 48.66 last week low. Under that looking at 47.51 then 43.00 level
FFIV Cannot cross 99.18. 93.60 first level of support
NAV Under the 50 DMA. Resistance 24.75 and could see 22.50 next support
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
Glass ceiling: DB Max risk today high and should fail the 200 DMA to see 37.50
Bye for Now!