If the market is "Hungry Like a Wolf", it managed to scare the livestock off, but with how much collateral damage? Second distribution day in volume in the last 2 weeks, but no real major volume to speak of. With S&P 500 (SPY), NASDAQ 100 (QQQ) and Russell 2000 (IWM) holding the fast moving average, what could be shaping up as a top after Tuesday's intraday reversals, ends Wednesday's session in need of further confirmation. And our go to sectors since 2012 began, Financials (XLF) and the Ultrashort 20 year Bonds (TBT) closed in the green. A gap lower and prudent to sell rallies. A positive open and the wolf could retreat to its den, but that does not mean all longs will be created equal.
The Dow (DIA) Filled the gap from Monday's higher open. Generally, once a gap is filled, a hold is a positive indication, and a failure beneath the gap area reason to maintain caution on the long side.
ETFs:
GLD Held 160.50 the low of the day it gapped higher and the 10 DMA at 161.46 but remains in a weak distribution phase.
XLF (Financials) Subs: R1 15.96 after 2 days under the floor trader pivots.
IBB (Biotechnology) Subs: Slingshot today so we shall wait
SMH (Semiconductors) Subs: Still working off of the slingshot pattern which like the description of the indexes means, could be vulnerable
XRT (Retail) First day of correction from the possible reversal pattern.
IYT (Transportation) One area to look at if pushes through the fast moving average.
IYR (Real Estate) Still has to clear and close above 62.00 to look good up here.
XLE (Energy) OIH (Oil Services) Would not be surprised to see a relief rally and/or sideways action now.
TBT (Ultrashort Lehman 20+ Year Treasuries) Held 19.90 which is exactly the correction I hoped to see. Now, over 20.27 would confirm. Subs: 2 days under the floor trader pivots. R1 is at 20.27 but could find issues around 20.60 first time up there.
Longs: Lots of stocks have a 2-day correction in place. Will not include anything that had a possible slingshot (new 60 day or longer high made Tuesday, followed by a close on the intraday low). Furthermore, the picks all held S1 unless otherwise noted. Depending upon how the market opens and trades in the first 30 minutes should tell us which category to focus on. If market fails, would not look to buy opening range reversals (Category 3). If opens well, Category 1, 2 and 4 will be a good focus. And if weakness prevails, look to shorts or the ultrashorts. Note the experimental names, based on surfing terms. (Thanks JM)
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:
AMP
CRM
TPX
FOSL (Did not hold S1 but had big move post market)
V (Closed below S1- must clear Todays' high and R1)
Category 2: (Pipeline) Positive Phase, Condition 2, 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:
REGN
C
Category 3: (Double Up) 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:
GOOG
INTU
MHS
MNST
WFM
PNC
ESRX
Category 4: (Rip Tide) 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:
FDX (Not quite oversold but held S1. Ideally should clear R1 92.30 which corresponds with today's high and hold 90.39)
Shorts: Eliminated anything with RSIs under 15 on weekly or daily. All have negative pivots and should not clear R1.
NBL (Narrowest range in 23 days)
ADTN
RIO
NSC
CNX
SINA
Goodnight!