Hard to look at more scary candles or a market that makes new highs then closes on its lows. It's hard not to view a lower close as the end of days. But, stepping back, there has been incongruity with rising oil and gold prices, low rates and lack of intervention by the FED since Operation Twist and a moderate economic recovery with the market climbing to highs not seen since 2008. Add Mr. Bernanke to the mix and a more sobering picture prevails. But, then there's AAPL and strong retail, consumer confidence. Every day I mantra-Rotation and Roll-which sector/group rolls over today and which sector takes charge? For quite some time now, this market requires pristine timing, both for entries and exits.
S&P 500(SPY) Held the fast moving average with a bearish candle and possible reversal (new highs, closing on the lows.) But, once again, need confirmation of this being the start of a big selloff. Subs-Negative Pivots
NASDAQ (QQQ) Recommended my subscribers exit many longs today. Whether that is correct remains to be seen. But, one can never see a top until the top is in place and although the bull trend was not violated, the overbought internals and skittishness of the market gave us at least pause. Subs-Pivots Positive.
Russells2000 (IWM) After the market closed, this traded under 81.00, which has been the wall of support. And, unlike SPY and QQQ, this has not made any dazzling new highs of late, rather, more sideways action. Been writing this was either the buy point or kiss of death. Now, 78.50 is the 50 DMA to watch for if this index cannot power back over 82.40 level. Subs-Negative Pivots
ETFs:
GLD Great stop today on our swing long at 171.65, especially in retrospect. Begs the case for trailing stops and sticking to the discipline.
XLF (Financials) Key now to watch since back under the 200 week moving average. But, week not over yet so big eyes on this group.
XRT (Retail) Out on a chandelier exit. Long from 56.60, exited at 58.97. However, still holding the fast moving average.
IBB (Biotechnology) Biotech was the first one to show strength. If this can go sideways and not fall apart, will look to this group to lead again.
SMH (Semiconductors) Now the second time this turned out to be a one day wonder (February 17 the first time). Third time's a charm meaning if this does another run and fails that would be ominous.
IYT (Transportation) has not participated in the rally to the same extent and gave a warning on February 7th when it broke the fast moving average. Back to looking at 90.85, last week's low and a failure, more reason to be cautious on the long side.
IYR (Real Estate) 59.80 last week's low and not completely lost if takes out today's high.
USO (United States Oil Fund) After Monday exit, now 3 days under the FTP holding the 10 DMA. Subs-Must clear R1 41.28.
MOO (Market Vectors-Agribusiness) Out of the long position.
TBT (Ultrashort 20+ Year Treasuries) Like to see a second close over the 50 DMA and over the 10 DMA would be nice too.
Longs: Unexpected liquidation day. This is the second time we saw a new high and close on the lows. After booking gains in many stocks and ETFs (plus a couple of small losses), we are in cash prepared to let the market tell us what's next. There are some recommended picks that held up amazingly well-UA IMAX COST i.e. proving that understanding swing trading and managing each stock individually is the key to trading.
SLG Held the 10 DMA and has positive pivots at 75.97. Risk to under today's low good. Pushing the 80 monthly moving average (77.39) at the end of the month. Been consolidating over the last several weeks. Has potential to 2011 high 90.00 or better. Day to Swing
AMGN Held the 10 DMA with positive pivots at 68.14. On today's video showed the trend line, which still has potential to break. Max risk the 10 DMA at 67.67. Has room over todays high to recent highs and higher. Day to Swing
WFM (Narrowest Range in 40 Days) 2days under the FTP and holding the 10 DMA. Max risk 80.33 and must clear 81.11 R1. Recent highs 82.36 and still a good looking chart. Day to Swing
UPS Sideways action with slightly negative pivots but holding the 10 DMA. Max risk today's low. Like to see R1 clear 77.22 with recent high 77.55. Then has room to 2004 high 87.70. Day to Swing
NFLX Inside day and still in recovery phase. Over the 10 DMA 115.37 would be a great sign, but first needs to clear Tuesday high and hold today's low. Day to Swing
Honorable Mention: Must Clear: TSLA (34.06) CREE (Inside day, Must hold 29.50 and clear today's high) Positive Pivots Opening Range Reversal: GOOG (Risk today's low) HLF AGU BIDU IMAX
Shorts: Many great short picks for the very patient worked well today VHC X BTU WLT ACOM. Others have been up and down DECK AMZN SINA SOHU. If looking for ultrashorts on the indexes or sectors-they are all in bearish phases so manage risk conservatively- DUG TWM in particular.
NSC negative pivots and cannot clear 69.62 with next target 67.56 then 65.80. Day to Mini
SOHU 50.38 max risk and could really be in trouble if breaks December low 45.40. Day to Swing
AMZN 160 level is still calling its name but it has been volatile along the way and hard to stay with. 180.89 is the negatively stacked pivot and a good tight risk for now. Day to Swing
Honorable Mention: Ideally OR high Failures: CHRW ATI (Must break 43.23) CNX (Cannot clear 36.54)
Goodnight!