Dow Jones Industrial Average (DIA) and NASDAQ 100 (QQQ) closed slightly higher on Friday while QQQ closed higher on the week and DIA basically unchanged. S&P 500 (SPY) closed lower on Friday but slightly higher on the week. Russells 2000 (IWM) sure was ugly all around, both for the day and the week. The consistent divergence in the market is fascinating and a bit daunting for traders. I began 2012 with the analysis that this year would yield lower commodity prices, higher interest rates, andU.S. Dollar, which in turn would lead to strength in the real estate, transportation, and financial sectors. The market had the u-turn for a short time in gold and oil, but can I safely put my money on my initial predictions now? Timing entries to control risk is everything. With so much indecision in the macro picture, ready to pounce, but patient in doing so. Oxymoron? Taking my cues from the market.
S&P 500 (SPY) After the bearish candle last Wednesday, had 2 inside days in a row and held the fast moving average. Taking a cue from IWM could get nasty, but another distinct possibility is more of this sideways action. Another is a breakout of the recent range. Subs-Negative Pivots
NASDAQ (QQQ) Held the fast and has some clearance from it. 64.00 now a level to hold. Subs-Pivots Positive.
Russells 2000 (IWM) Broke 81.00 and like the nursery rhyme, came tumbling down. No big volume on the decline. 78.80 is the 50 DMA to watch for now. Not bearish by the way, just gave the weaker longs reasons to be nervous. Subs-Negative Pivots and if clears R1 over 81.30, would not expect anything huge, rather more reason to expect sideways action at the new trading range.
ETFs:
XLF (Financials) Closed just above the 200 weekly moving average with 2 inside days in a row. Seems like a good sign that it would pause so close to the major trend reversal. Still counting on this sector to show us the way.
XRT (Retail) Still holding the fast moving average.
IBB (Biotechnology) Biotech was the first one to show strength. If this can continue to go sideways and not fall apart, will look to this group to lead again.
SMH (Semiconductors) Would like to see this hold 34.00 and head to oversold on the RSIs. Otherwise, could see 33.00 quickly.
IYT (Transportation) Sideways, sort of middle of the recent range-unclear.
IYR (Real Estate) 59.80 support level and looks good if takes out Friday's high. Positive Pivots
Note: USO MOO XLE GLD are all still in bull phases. They could be rolling over, but no real confirmation in place as of yet.
TBT (Ultrashort 20+ Year Treasuries) Still like this but have no real confirmation of anything right now except a recovery phase with the same trading range been writing about for the last several weeks. Show yourself!!! The only one getting rich on this right now is the brokerage firm that books my commissions.
Longs: Stayed in TSLA and WFM for swing trades-both featured and discussed during last week's live coaching. Staying the course!
VMW After a bullish engulfing pattern had an inside day and DOJI on Friday with positive pivots at 101.68 and a good risk down to Thursday low 99.31. Recent thigh 101.99 which if clears could take this to 105-106 next. Day to Mini
JCP Oversold, inside day and holding the 50 DMA for a clean risk to under 38.22. Like to see this clear R1 39.27 which corresponds with Friday high. Will run into resistance at 41.00 level. Could then see the 10 DMA clear, so trade it as a hybrid, part swing part mini in case it continues since weekly chart looks good. Day to Swing.
AMGN Held the 10 DMA but now must clear R1 68.01. Has not cleared the trend line, which still has potential to break. Max risk the 50 DMA at 66.97. Recent highs 70.00 and over that could see move to numbers not seen since 2004. Day to Swing
NTAP Good move Friday and now with positive pivots want to see some follow through and clearance above the recent highs 44.14 and a hold of the 10 DMA 43.05. If can get going, has some resistance at 45.00, then 48.24. Day to Mini
SPG Provided it holds Friday's low 136.38, with positive pivots, been going sideways and could see more upside from here especially if clears recent all time high 138.48. Day to Swing
SWI After a bullish engulfing candle last Thursday, ended Friday with an inside day and positive pivots at 38.39. Could use Friday low for a risk. Stock began trading in May 2009 and made new highs in February this year at 39.75. No history to predict where it can go. Day to Swing
Honorable Mention: Must Clear: CVX (110.03) CREE (Must hold 29.50 and clear 30.70) Positive Pivots Opening Range Reversal: TSLA BIIB IBM NFLX BIDU
Shorts:
X After it broke down last week, it spent the next 2 days consolidating but not able to cross back over the 10 DMA which is the resistance area to stay beneath at 27.92. Then, could see 26.65 and lower if fails and next support at 22.25 level. Day to Swing
CHRW Under 66.08, with max risk 66.73, could see more downside with next support 64.00 then 62.30 last August low. Day to Short-term Swing
ATI Not quite oversold on weekly and not on daily or monthly. Like so many short picks, seems to have one good down day followed by 1-2 up days, so risk now 44.47. Then, if cracks under last week's low 43.14, could see another leg down to 40.00. Day to Mini
AMZN Ended with hammer candle and positive pivots but feel compelled to include this in case it breaks under Friday's low and does not clear 180.02. 160 level is still calling its name but it has been volatile along the way and hard to stay with. Day to Swing
Honorable Mention: Ideally OR high Failures: NSC
Have a great Sunday!
