S&P 500 officially closes above the 2008 high.NASDAQ is trading in a price range not seen since 2000. I started to see inklings of the bears on Friday-from the Gann followers to the naysayers to the economists who predict double dip recession. People love to be "right." They love to think of themselves as "prophets", first to predict the gloom and doom. It's what we are programmed for-living in prehistoric times, waiting for the Woolly Mammoth to come and get us. But, our mind is not always our friend. Technical analysis includes both lagging and leading indicators. The signs have been for upside since 2012 began, especially in NASDAQ. There was one test of the 200 DMA in June. That moving average was never violated. Those lows are now a distant memory. Let the market speak to you-watch the moving averages, volume patterns, price action and relative strength indicators. Then, forget being first to call a top or bottom. And always, trade with a plan.
S&P 500 (SPY) The RSIs are high but not in the stratosphere. Digestion and correction of course is welcomed for those not already involved. The bigger question is will investors come in with the mindset that equities are still relatively cheap? 147 pivotal, 144.45 area support. 153.50 area is resistance based on swing highs from 2007.Subs: S1 146.61
Russell 2000 (IWM) 86.82 is the 2011 high. Friday it tested with an intraday high of 86.96 and then closed under the 2011 high. So, that is a real concern-can it clear and if not, will the wooly mammoth be around the corner after all? Subs: S1 and Friday low line up
Dow (DIA) 137.64 last swing high 2007.Subs: S1 and Friday low line up
NASDAQ 100 (QQQ) 68.86 looks like the magic number to hold. It did get up to the weekly Bollinger Band, which along with IWM could be a real place to look for resistance
ETFs:
GLD DOJI day and not quite to 2012 highs
XLF (Financials) 16.00 now support. Doji day with 2012 highs with 17.20 the 2011 high
IBB (Biotechnology) Began the year taking out 110. Now, up 29% since then. Looking for signs of fatigue, or at the very least, not first on my list for the next big move.
SMH (Semiconductors) Like that the 200 DMA turned up and this cleared it. Next hurdle is 34.00 provided 33.00 holds
XRT (Retail) Continue to look for corrections in this hot group
IYT (Transportation) Subs:Closed over the trendline I showed you with high RSIs. Might have to dance around it for a while to work off the overbought condition before continuing north.
IYR (Real Estate) 68 resistance based on the weekly Bollinger Band.
USO (US Oil Fund) 36.70 the 200 DMA
OIH (Oil Services) 44.10 the 80 monthly moving average resistance this has not cleared since a year ago August
XLE (Energy) Made a new 2012 high
TBT (Ultrashort Lehman 20+ Year Treasuries) Subs: Close to second major profit target
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: Will not include anything that has an RSI over 94.00
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:
TSCO Inside day with 5 days under the pivots. But, if 96.65 holds, then over 97.50 then Friday high, could recover and make another run.
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:
ONXX 76.00 good risk on the 10 DMA and through 77.00, see a test of the highs 79.20 ad perhaps beyond
UA 59.10 the 10 DMA and number to hold
IACI Still flagging, especially if breaks out over 53.00. 51.85 now support to hold. Narrow range day.
ASML Improved to condition 1. Doji day. 56.50 is a good area to hold. Through 58.00 could see a new leg up
REGN Improved to condtiion1. Has to hold Friday low.
FDX Inside day. Using Friday range, over 91.00 good for swing provided 88.75 holds
ALXN 109.20 has to hold. Has room to 115-116.
Phase Change: CHRW Over 57.64 would try again with risk 57.09 CHK Unconfirmed accumulation phase. BLK 182 now the 200 DMA to hold PXP Unconfirmed bull phase provided Friday low holds APDUnconfirmed accumulation phase provided 84.94 holds TSLA An unconfirmed recovery phase. Has to hold 29.80 FDO 2 inside days. Could be good for long or short. Watch for move over 64.90 long and under 63.60 short
Shorts:
Category 5:Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CHKP Unconfirmed phase change back to bearish. Cannot clear 48.78 and should break Friday low, the 10 DMA
CERN Unconfirmed phase change to distribution. Cannot clear 73.20. Since had inside day, like to see Friday low break
AGN Phase change from accumulation to recovery. Should not clear 89.60 and really should break 88.25 the 10 DMA
Bye for Now!
