One never knows a top is in place until it confirms. So, even though we had the bearish candle in S&P 500 (SPY), followed by the 2 inside days, followed by the break of the range and now, the gap lower, can we safely say this is a top? I'd rather put it this way; as I have been warning about since the Russell 2000 (IWM) broke 81.00, extreme caution on the long side, keep in mind the trend remains bullish and look for the signs that it is safe to jump back in.
S&P 500 (SPY) When there is a gap down in a bull market, typically, watch for a return move over the high of the gap down day to follow up, a second digestion day followed by a gap higher the third day or a cash position until the market tests a major moving average (such as the 50 DMA) establishing a support area.
NASDAQ (QQQ) DOJI on this gap making the above strategy possibilities even more compelling in this index. Subs- R1 is over today's high 63.78
Russell 2000 (IWM) Getting close to oversold and landed on the 70 EMA and closed just shy of the 50 DMA. Subs-Could need some digestion, but at 78.00 against the 65 weekly moving average, would be a low risk buy on the oversold reading.
ETFs:
GLD Unconfirmed phase change to distribution. Needs a second close under the 200 DMA to confirm, but will also begin to look oversold. Subs-a move back over today's high and returns over the 200 DMA which could be good for a miniswing long.
XLF (Financials) Back looking at 14.39 the last swing low made on February 16th.
IBB (Biotechnology) It broke 118 immediately this morning and gave a great early morning short trade. Now, 115.64 recent low, and getting oversold. Subs: A market maintaining a bull trend that gets oversold is one of my favorite environments to find momentum trades in. All in the timing.
SMH* (Semiconductors) Held the 50 DMA and closed better than the market. In the next "As the Sectors Turn", episode, we look to semis to lead. Subs-R1 33.53 corresponds with today's high.
IYT (Transportation) Confirmed weak warning phase.
IYR (Real Estate) Fake out after it broke out from a wedge yesterday. Under 59.80 would not touch, but if holds here and begins to turn back over 60.45 area-still a good group to look at.
TBT (Ultrashort Lehman 20+ Year Treasuries) Made my brokerage house happy again. Got out of the long position, but this ETF is always on my list as a potential bottoming one.
Longs: Only stocks that outperformed their corresponding index.
UPS Officially oversold and outperformed the market holding the 50 DMA at 75.49. With that now a good risk, if clears over the pivots at 75.75 and then R1 76.11, could be the time to get in for a swing trade. 2006 high 83.99 with all time high made in 2004 at 87.70. Day to Swing
JCP gave us a ½ ATR gift in just a few minutes, then stopped us out at no loss. Ended the day with a hammer candle, oversold still and right on the 50 DMA which gives us another clear risk under today's low provided it clears the neutral pivots at 38.71. R1 is of less importance now since it crossed there today. Holding S1 is very important. 40.25 is the 10 DMA with a weekly and monthly chart that still looks like potential basing action. Day to Swing
CRM Holding the gap from February 24th and now 2 days under the FTPs at 140.14 which like to see clear first. Then, it is resting on the 10 DMA at 140.50 and also needs to clear R1 141.95. Then, still looks good with recent highs 146.26. Looks like 150 as a target not unreasonable. Day to Mini
SPG Inside day. Held the 10 DMA at 136.47 now max risk. Negative pivots at 137.19 which needs to clear and ideally R1 137.75 as well. Lots of sideways congestion, but will need the market to firm or at least digest before it gets the oomph to power out of this range and test 140.00. Day to Mini
CELG Plain and simple, now has to clear R1 72.97 which also clears today's high. Then, the 10 DMA at 73.85 to keep going. Also needs to hold the 50 DMA at 72.15. Day to Swing
TWC Closed under the 10 DMA and now oversold with 3 days under the FTP at 77.92 which must clear first. Good risk to today's low. Then, the 10 DMA is 78.45 next area. A close above would look good for a move to recent highs at 79.95 and possibly beyond to 2011 high 80.86 or higher. Day to Swing
Honorable Mention: Must Clear: AMGN (67.26) NBL* (96.30) Positive Pivots Opening Range Reversal: None
Shorts: Since the short picks have yielded great follow through and so many are oversold, see very few good setups right now.
DECK Never got an OR high failure or OR breakdown. Has negative pivots at 75.12 and if can finally break 74.15, could see a selloff to 65.00. Day to Swing
Honorable Mention: None
Goodnight!
