The Dow (DIA), S&P 500 (SPY) and Russell 2000 (IWM) all recovered from the gap lower to close in much better shape. However, we remain tempered in enthusiasm as the quarter ends because all ran up to resistance at the fast moving average. The exception is NASDAQ 100 (QQQ) which never broke beneath the fast moving average to begin with. Therefore, will be watching to see how QQQ in particular go out Friday. Expectation is a quiet day, typical of Fridays. Pay close attention to some very beat up stocks as they may be ready for a short covering rally. Subs: See Note under Shorts.
Subs: QQQ IWM SPY all have 2 days under the FTP. In classic terms, IWM SPY are Condition 2s and must hold the pivots and clear not only R1, but also the 10 DMA. QQQ are in a condition 1, which means the 10 DMA becomes a risk point and a clearing of the pivots and R1 very positive.
ETFS:
GLD Subs: 3 days under the Floor Trader Pivots and hammer candle. Sloppy chart, but good to keep eyes on.
XLF (Financials) Subs: R1 15.82 after 3 days under the floor trader pivots.
IBB (Biotechnology) Subs: Slingshot still intact unless it clears highs
SMH (Semiconductors) Subs: Still working off of the slingshot pattern but held last week's lows finding support. Overall very friendly to this sector, but might just let the week and quarter end before taking a stance.
XRT (Retail) Day two of correction from the possible reversal pattern although it came back from the lows to close under resistance. Still cautious here for now
IYT (Transportation) Good bounce off of the EMA. 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) The start of the relief rally has begun. XLE held the 200 DMA. OIH had an inside day. Subs: Both still need to clear pivots to stay firm.
TBT (Ultrashort Lehman 20+ Year Treasuries) Not one to catch a falling knife, bought it cheap and sold it a bit cheaper. Like the support at 19.70, but needs to prove itself. Subs: 3 days under the floor trader pivots. Now needs to clear 20.00.
Longs: Ending the week, still mainly in cash. Please note that the goal with the new format is to group trades so that we have setups to look at depending upon how the day is shaping up. For example, in Category 3 last night, INTU MNST PNC all held previous day lows and with positive pivots, had low risk entries on the opening range reversals. CRM in Category 1 cleared the pivots and the 30 minute opening range. Instead of having the picks listed randomly, we are trying to have a focus, and then adjust accordingly. I am tweeting the setups as I see them. If you do not use twitter, please email me if you have a question on a trade.
Category 1: 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:
TPX (Should hold 83.40 the FTP and clear R1 84.77)
V (Should hold 117.95 and clear 119.57)
QIHU (Should hold today's low clear 25.40)
EXPD (Unconfirmed Bullish phase 3 days under FTP clear R1 46.56)
Category 2: 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 (Inside day, 3 days under FTP, has to clear R1 115.90)
CMI (Condition 4 Needs to hold 118.50 and clear 120.90)
DLR (Hold today's lows and clear R1 73.21)
UPS (Hold 70.50 and clear 80.30)
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:
CRM
FOSL
INTU
BIIB
PAY
CLF (Unconfirmed phase change to recovery. Has to hold 69.60)
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:
LULU (Inside day must hold 70.88 and clear 73.76)
Shorts: No shorts tonight since all are oversold and some have made new 60 day lows and closed on intraday highs (slingshot). DECK OXY* (hammer and on 200 DMA) APA NEM are best examples. Means over R1 could see daytrade to mini rally.
Goodnight!
