I always have to preface any stray comments from technical analysis with the disclaimer that I am not an economist. But I wrote about Operation Twist a week before it hit the twitter stream because it seemed the right thing for the FED to do even though the market didn't think so. Encouraging spending and lending is a saner longer term solution to the ephemeral high of money injection. When you look at the board, many stocks are near all time highs while others have been demolished. A stronger dollar for real and not just a safety haven to an even worse off European currency, is also good longer term. Best to watch the sectors/groups that could have a positive (and delayed) response to a strong dollar, low long term and higher short term rates such as auto manufacturers, housing, consumer and capital goods (the statistics show the US consumer is getting him/herself out of debt faster than anticipated)
SPY Inside day, bullish engulfing pattern and positive pivots all make for a case that the break of the range will result in good follow through one way or another-either for a bounce or continuation much lower. 114.75 is the 200 weekly, the second time this year we have closed beneath. That lines up perfectly with Friday's high and R1 at 114.40. Stranger things have happened than reversals when everything looks bleakest. But, one must also prepare for a breakdown with the support down at 87.00 the last swing low in 2009 before the run up.
DIA Back in August, this never closed under the 200 weekly and such is still the case. Subs-positive pivots must also clear R1 108.14 or break of lows see 96.00 next level of support.
QQQ Like SPY, inside day, bullish engulfing pattern and positive pivots. Could run to 56.00 level next resistance or fail the lows and see 52.00 next level and still a long way off from the August low 49.93 and the 200 weekly at 45.00.
IWM Tested the August 9 low then rallied to close just shy of the 200 weekly moving average at 65.32 with yet another inside day. Move on breakdown measure to 50.00, so unless it breaks 65.75, still very vulnerable. Above there could see a bounce back up to 69.00 without violation of the trend.
ETFs:
GLD "What a dump!" to quote Bette Davis (you youngins may not know who she was) . Nearing oversold but not necessarily the next big play regardless as the tables turned or should I say twisted?
SMH It bounced, now must show more leadership and climb back over the 50 DMA to get exciting. Should hold 29.50 if good.
XLF Must cross 11.80
IYR held the 200 weekly and now must cross but with negative pivots now must cross R1 51.71.
TLT Bearish Engulfing Pattern at 2008 highs and overbought on the monthly chart.
Longs: Since my main focus was indexes, I did not make one trade Friday with the inside day although there were some good movers from recent picks (VFC DISH DECK) Monday, the focus will continue to be on the indexes for a range break.
AAPL Inside day, positive pivots at 403.58. Must hold 399 (the 10 DMA) since it had an ominous 2 red candles near the highs. With positive pivots it can be considered on an OR reversal if holds support. Once it clears R1 407.30, could see 411, then recent highs. Day to mini.
CF** Closed right on the 200 DMA with an inside day and now positive pivots at 145.56. R1 lines up perfectly with Friday's high for a good confirmation long with stop conservatively ½ ATR under 145. Could see run to 162 since when this wakes up big moves are not surprising. Day to swing
AMZN A Condition 2 with an upward sloping 10 DMA, an inside day with negative pivots now 3 days under at 222.35. Provided it clears R1 at 225.65 then can go long with risk to pivots. Otherwise, could see quick drop to 211. Day to mini
CL Tested and held the 50 DMA with an inside day and positive pivots at 88.37. Over R1 89.75 has to clear the 10 DMA overhead but not a bad looking chart in a good sector/group with 94.89 recent all time high. Day to mini
F The auto manufacturing ETFs CARZ VOMC are not tradable. I looked at the major auto stocks and found that F is the most compelling as far as clear risk to under the 200 weekly moving average at 9.05. Pivots neutral with R1 10.12 to clear. Will price options. Mini to swing
TSLA with a second close over the 200 DMA 26.12 will go into an accumulation phase with risk under last week's low for swing 24.88. Could see move to 30.00 and up. Day to swing
Honorable Mention: DECK (if holds 97.09 with OR reversal) CMG* (Through R1 324.87) DISH (If holds 26.63 and OR reversal) VFC (if holds 123.39 with OR reversal) CELG (OB on weekly RSI not daily, Condition 1 with 3 days under FTP at 62.86) ORLY (Through 69.69) CBST (If holds 35.70 with OR reversal) PANL (ID through 53.00 then 54.50 the 10 DMA)
Shorts: Watch ultrashorts since Friday inside day in indexes
CRM As long as it does not clear 121.66 R1, if breaks under the positive pivots at 119.41 can see 109.25 level. Day to swing
VMW Inside day and bullish engulfing but a heavy chart and not oversold. Provided it does not clear 86.12 and breaks under 83.40 S1, could see first a test of Thursday's low 81.68 and then 76.70. Day to swing
GOOG Inside day and same issue with positive pivots and heavy chart. If cannot clear R1 519.68 and breaks the pivots at 522.09, then could see a drop to 501 the 200 weekly moving average. Day to mini
CMI similar scenario to GOOG with R1 that should not clear if good short at 87.97 with pivots to break at 86.21. Target 79.60 level then 200 weekly at 63.75 level. Day to swing
ANF Negative pivots at 61.88 that cannot take out R1 63.43 since that also corresponds with the 200 DMA. If breaks has support at 55.70 then 47.00 Day to swing
Honorable Mention: TPX (ID must break 200 DMA 54.85) HON (under 41.64) ORCL (under 26.10)
Have a great Sunday!