Although the S&P 500 closed down from Friday 3/16 to Friday 3/23, with very little damage, the market worked off some of the overbought conditions and more importantly, the irrational exuberance it was approaching. On the other hand, NASDAQ 100 (QQQ) ended higher comparing weekly close to weekly close. It still has a concerning new multi-year high, and then a close on the low 3/21, making 67.03 a possible top; but at this point, other than sideways action, no real evidence of that.
NASDAQ (QQQ) A convincing break of Friday's low might be troublesome. Subs: 2 days under the FTP with R1 and Friday high aligned.
S&P 500 (SPY) One to watch as it closed beneath 140.00 and the fast moving average. 138.09 the low of the gap from 3/13. Looking at that level to hold. A move above 140 positive. Subs: Pivots Positive
The Dow (DIA) After a 5 day drop, corrected on Friday. Question is whether or not it will continue back through the fast moving average. Subs: Positive Pivots
Russell 2000 (IWM) A good end to the week closing right back at the fast moving average. Subs: Positive Pivots
ETFs:
GLD Possible island bottom. Needs a second day holding above 160 to confirm. Then, we are back looking at the 200 DMA
XLF (Financials) Held 15.50 and that could be the end of the correction.
IBB (Biotechnology) I write about these groups every day to help direct you to discern not only how to look at sector rotation, but also to help you step back and see how the stronger groups predict how strong or weak a market correction might be. This definitely keeps us focused on the buy opportunities.
SMH (Semiconductors) Held the fast moving average and closed okay. Big eyes on this.
XRT (Retail) Hammer candle, held the fast moving average-still very much a leader
IYT (Transportation) Hammer candle after several days of correction. The 50 DMA has been pivotal.
IYR (Real Estate) Looks amazingly similar to IWM chart
XLE (Energy) Confirmed warning but holding a key weekly moving average. A good sector to go to if market weakens
TBT (Ultrashort Lehman 20+ Year Treasuries) 20.00 area and an oversold daily RSI will be awfully tempting.
Longs: The biggest issue is narrowing down the choices each night. That's a good problem to have. But, to keep the list more manageable, experimenting with listing the stocks in categories. I suggest you choose a category or two that you like to trade and focus on those. Your feedback is greatly appreciated.
Category 1: Positive Phase, Condition 1, 2 days under the FTPs, Risk to Prior Day's low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:
DTV
EL (Hammer Candle)
SWI
Category 2: Positive Phase, Condition 2, 2 days under the FTPs, Risk to Prior Day's low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:
COST
Category 3: Positive Phase, Condition 1 through 4, Positive Pivots which means candidate for Opening Range Reversal, Risk S1 or previous day low, whichever is lower unless noted differently, Target- Day to at least 3 ATRs from entry:
C (Inside day)
DB
CF (Opening Range Reversal best to control risk)
NTAP
PAY
LO
XEC (Inside day)
MCP (Not a Condition 1-4, in Recovery Phase and has to clear R1)
Category 4: Oversold (2 or more days under FTP), Condition 1-4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
ROK (Inside day)
UTX
SHLD (R1 and Friday high line up)
CSTR (Inside day R1 and Friday high line up)
Shorts: Since so few choices, keeping old format for now
FCX Inside day, negative pivots and must not clear Friday's high. Under Friday's low, watch for the 200 weekly moving average 37.25 to hold, otherwise, 30.00 reasonable target. Day to Swing
Have a Great Sunday!
