When one looks at the scan of unconfirmed phase changes among 400 or so instruments, one is struck by how evenly divided between negative and positive phases the list appears after the trading session. Although divergence has been a constant theme throughout 2012, the division seems more marked especially after the "end of summer, first day back at school" mentality. Semiconductors, financials down, real estate, biotechnology and retail up-all, however, still very much in consolidation after the last several weeks. Indexes are all still very much in bullish phases.
S&P 500 (SPY) After Friday's large accumulation in volume, Tuesday's session began the week with dead on average volume. Remains under the fast moving average with a doji day. 140 area key support and 141.56 good area to clear to resume move up. Subs: Pivots Negative
Russell 2000 (IWM) Here is a classic example of divergence. Came close to testing the August high but not quite. 82.70 is that number. Held the fast moving average on great volume. 81.15 area now support. Subs: Pivots Positive
Dow (DIA) Got close to the 50 DMA and bounced but not quite enough to push it through the fast moving average keeping this a weak link. Subs: Pivots Negative. 130.89 clears the 10 DMA, R1 and worth watching.
NASDAQ 100 (QQQ) second session of a range expansion . Held Friday's low and closed with a DOJI day-just shy of the fast moving average. Subs: Negative pivots so want to see this clear 68.50 and hold today's low.
ETFs:
GLD 162.45 closest support as this nears overbought
XLF (Financials) 15.20 number to clear and 15.08 to hold. Subs: Pivots Positive
IBB (Biotechnology) 138.75 last swing high cleared today. Approaching but not quite overbought
SMH (Semiconductors) Held the 50 DMA nearly to the tick. Over 32.95 should bring back buyers. Under the 50 DMA some key weekly moving averages next support.
XRT (Retail) Over 62.00 will break a trendline and should be good for this sector. 61.10 now key support
IYT (Transportation) Huge divergence-as the market went up first ½ of 2012 so did this. Now, it is under the 200 DMA significantly and breaking bad with the rest of the market. This concerns me.
IYR (Real Estate) This group, on the other hand, is also where it's at. 66.21 last swing high to clear. 65.25 to hold.
USO (US Oil Fund) Inside day and consolidating under the 200 DMA. Also a reason that transports are floundering
OIH (Oil Services) Touched the 200 DMA which means, eyes hereif continues to hold
XLE (Energy) Subs: This had a slingshot pattern on 8/21 which means if clears 71.70 more compelling, but will have to also clear 73.00 to negate it completely.
TBT (Ultrashort Lehman 20+ Year Treasuries) 15.36 now resistance or point to clear for some follow through
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:
WFM 95.73 risk. Like to see 96.66 clear or the FTP then today's high which lines up with R1.
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:
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:
AAPL Improved to condition 1. Risk 667.71 S1 and around the 10 DMA. Overbought on weekly RSI, but this is AAPL
KSU Improved to Condition 1. 77.55 is the 10 DMA to hold and over 77.90 especially on closing basis should give this room to recent high 79.50 and possibly beyond.
SLG Improved to Condition 1. 80.85 the 10 DMA to hold. Over today's high should continue move with 90.00 a reasonable target
FIRE Had big volume and range expansion. Resistance at 54.40 so a reversal would tighten risk against the 10 DMA or 51.90
LNKD Inside day. As long as it holds today's lows, over today's high would follow. Target 113 initially
TDC 76.05 max risk. Over 78 and should see 79.89 all-time high and beyond
IACI 51.80 good tight risk. Like to see the 10 DMA hold at that level for a move to 54.20 and beyond
STX Inside day. 31.68 max risk. Like to see it clear the 10 DMA and improve in condition.
LEN New high close. Like to see 32.20 hold.
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:
Phase Change: CRZO Unconfirmed accumulation phase. Needs second close above 25.74 with 26.53 big point to clear. SINA Unconfirmed accumulation phase provided 58.70 holds. Positive Pivots F Unconfirmed phase change to recovery. 9.35 good tight risk and like to see 2nd close over the 50 DMA. 10 DMA 9.41Swing traders have risk to 8.79 CTXS Confirmed phase change to recovery. Inside day. Must hold the low and clear today's high. Over 79.00 can see gap fill to 80.55 first resistance
Shorts: New subs-I rarely include anything with an RSI under 15.00-especially in a bullish market
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
APA Approaching oversold so day to mini at most provided it does't clear 85.53
TKR 40.67 the 10 DMA max risk. 34.60 first target
NTES Under today's low breaks the 10 DMA with 51.30 area tight risk and target 49.30 area
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
HUM Reversal after strong open. Tight risk 70.12 the FTP. Under today's low could see 66.00 area.
Bye for now!