Nasty yet an oversold 2-day Relative strength indicator in many instruments. Also, a distribution day in volume. The weekly and monthly RSIs are not oversold. More important, is that AAPLdropped precipitously and GOOG might have had a key reversal today. Giants make big bangs. Overall, since been writing about the disturbing action in financials, semiconductors and transportation, the now, the risk on the short side is too great. Would wait for market to find a wall of support before jumping back in. Factoid-market is beneath the price it was before QE3.
S&P 500 (SPY) Unless gets back above 144.66, could see test of 143.54.
Russell 2000 (IWM) 2 weeks ago I found the clearance of the old 2012 high intraday with an ensuing close beneath troublesome. Troublesome indeed. After the doji day Monday, this dropped to test 83.70 support and fast! Back above 84.45 would be a relief.
Dow (DIA) 133 big area of support
NASDAQ 100 (QQQ) Dropped right to its next support at 68.90 after it gapped under the fast moving average Monday. Second distribution day in volume in last week and oversold on daily RSI. Let's see what happens at 68.00
ETFs:
GLD Under 170, next support 164.
XLF (Financials) Broke 15.71. 15.50 then 15.20 next areas
IBB (Biotechnology) With 3 trading days left to the month, watching to see if hold the close of last month considering it has done that all but one time this year
SMH (Semiconductors) 31.32 July low before the rally. Today's low 31.30. Let's see if it can hold here
XRT (Retail) Stayed out of its way 62.17 an area to watch
IYT (Transportation) Subs: Slingshot negated since could not close above previous day high. But if holds yesterday low, could still confirm one. That and the channel is what I am waiting for
IYR (Real Estate) Never came close to clearing the 50 DMA. Seriously oversold now
OIH (Oil Services) 40.40 the 50 DMA
XLE (Energy) 72.75 support
TBT (Ultrashort Lehman 20+ Year Treasuries)Oversold and near the 50 DMA
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: Only picks that held S1 or are against a major moving average and are very oversold
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:
DVA 99.51 max risk. Like to see today's high clear
ONXX 81.49 max risk. Like to see this clear 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:
BEN Held S1. 123.94 max risk. And for end of day adjustment want to see it close over the 10 DMA
OII Held S1. 55.02 max risk. Has to close end of day over the 10 DMA to stick with the trade
AGU Held S1. 101.10 is max risk. Has to close end of day over the 10 DMA to stick with the trade
CRM Max risk 152.05. Like to see it close end of day over the 10 DMA.
TROW Wanted to add a financial. Oversold, 50 DMA is 62.06. Max risk
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:
ESRX Improved to condition 1, today' low max risk. Actually has positive pivots. 64.33 all-time high
V 133.51 max risk. Really ahs to clear and close above 135.30
IBM 204.90 max risk. Has to close end of day over the 10 DMA to stick with the trade.
COG Max risk 43.46. Like to see it close end of day over the 10 DMA to stick with the trade
EWW Max risk 64.12. Has to close end of day over the 10 DMA to stick with the trade
KSU 75.83 the 50 DMA to hold. Over 77.70 looks good
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:
SWN 50 DMA 32.50. Also could use today low for risk. Like to see it clear 33.65
Shorts: Not much right now since oversold conditions
Bye for Now!
