If You're Offered a Seat On a Rocket Ship... Just Get On

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Sheryl Sandberg

A couple of signs coming into Tuesday’s session made the rally not only probably but somewhat expected. First, the S&P 500 broke the recent trading range on Monday yet closed within the range. Secondly, the Dow or DIA held on tight and outperformed the other 3 indices.

NASDAQ, although broke the range on Monday, maintained a strong bullish phase. Finally, the small caps, which broke 2 major moving averages, although an important piece of the puzzle, have not been as integral to the 2014 market. Noteworthy, is our second day confirmation requirement, which did not happen. Similarly, now that IWM is back over those major moving averages, it too will require a second day confirmation.

In fact, that second day confirmation is required for Tuesday’s move altogether on the heels of the FOMC decision. Therefore, we are calling this rally expected but also possibly a one day wonder forcing the indices back into a range.

Best news is that the Dow closed on new highs along with many of the stronger sectors, which had a more than decent correction, coming back strong.

If the market continues to hold, there are many places to go for new swing longs. As always, risk/reward will be first consideration.

S&P 500 (SPY) After writing that it still appeared to be coiling and had to take out 199.41, now back to writing about 200 as pivotal

Russell 2000 (IWM) Taketh and now giveth back-of course, needs a second day confirmation in the unconfirmed bullish phase

Dow (DIA) New high close here.

Nasdaq (QQQ) Came back right onto resistance so really needs the second day here

XLF (Financials) Never broke the downside of its recent range and now has to take out the upside

KRE (Regional Banks) Broke the 200 DMA for an unconfirmed phase change to Recovery. Could be a reaction to anticipating a dovish FED decision-still eyes on

SMH (Semiconductors) Did set up for a low risk buy early on. Now, right into resistance

IYT (Transportation) Rangebound even after Tuesday’s strength

IBB (Biotechnology) Bounced off of 265 and now it too is into some resistance

XRT (Retail) Held last week’s low 87.68 and ran up over the 10 DMA-rangebound

IYR (Real Estate) A little bounce but not too convincing

ITB (US Home Construction) Needs more work but would keep eyes here

GLD If this is the bounce, I would say weak at best and a good short opportunity awaits

USO (US Oil Fund) Good to keep track of yearly lows-when met and an instrument is oversold, you get a really great bounce

OIH (Oil Services) Bounce to resistance

XLE (Energy) Also bounced into resistance

TBT (Ultrashort Lehman 20+ Year Treasuries) Seems to be saying FED will continue taper maybe make a statement about the Fed Funds rate

UUP (Dollar Bull) Totally Consolidating

FXI (China Large Cap Fund) Briefly broke 40 but came back to close well-long term still friendly