Market Analysis for Trading on 2/12/2018

Mish Schneider | February 10, 2018

***Earnings next 2 weeks: GRPN 2/14 before open, LMB 2/13 after hours

We now have nothing left from 2017-all were stopped out with the trailing stops-most after we took 2 profit targets. This is the perfect evolution of a swing trade. Get in at inflection point, use profit targets to lock in, raise trailing stop to give it room but keep the tail profitable regardless. Next week, I will cover this evolution with a few examples-CMC BHP JD and XRX

2017:

***Out on trailing stop after reaching one profit target-Blackberry BB ATR: .21. Long at 10.97 Trailing Stop: 11.14 First profit target: 12.87 Reached! 2nd Profit Target: 14.94 for another 1/2

***Out on trailing stop at 22.19 after taking 2 profit targets CMC: ATR .49 Long at 19.50. Lower Trailing stop: 22.19

2018

Ultrashort Treasury Long Bonds-TBT ATR: .49 In from around 34.50 Trailing Stop to: 35.24 We took off ½: 38.05-Second Profit Target: 39.74

Limbach Holdings Inc LMB ATR: .46 Long around 13.30 No loss stop-sold ½ at 14.00, next target 14.97

2nd Profit Target Reached! Sold ½ of remaining at 34.00 Twitter TWTR ATR: .85. Long at 22.85 Raise Trailing Stop: 26.74 First Target reached!: 25.94 Second Target: REACHED at 34.00

***Out at 4.94 on the ½ position-now we wait until after earnings report. Groupon GRPN ATR: .17 Long ½ position at 5.42 Risk to 4.94. Will hold and if no cushion of not stopped out will consider whether to hold into earnings

CORN ATR: .14 Long at 17.20. First Target for 1/2: 18.04. Risk 16.74

New:

***Never triggered-

Same Instructions:

Latin America (ILF) ATR: 1.01. Retraced very close to several major moving averages- The 50 DMA, 17 WMA and 80-month MA. If opens above 36.00, can buy on a 30-minute opening range breakout. The sell stop (widest one) is 34.67. (in a bullish phase-this is a retracement to phase breakout trade)

Gold ETF (GLD) ATR: 1.24. If this opens and holds above 124.40, then can look at an opening range breakout buy over 125.14. Risk is then under 123.50 for room.

Allegheny Technologies ATI ATR: 1.24 Already reported. Unconfirmed bullish phase. If holds 25.76 and clears 26.55 (with a 30-minute OR) then can buy with a risk to 24.17

***Never triggered-Remove for now DDD (3-D Printing) ATR: .57

If you have questions, please ask me on @marketminute my twitter account

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Once a Dated Helicopter Crashes, Can It Fly Again?

On February 5th I wrote, “S&P 500 (SPY) I’m going out on a limb to say that 254-56 is the place to start buying again.”

This was after the epic call for the correction I made on January 23rd, “What I discovered today, will unequivocally help you determine if not the top of the market, at least a major inflection point for a correction.”

SPY at that point closed at 283.29.

So, now that we have fallen from the top of the tree, limb by limb, to 254, are investors bruised enough?

The massive reversal of the formerly complacent, to totally whacky volatility (VXX) index, created significant damage.

Which is why, the 200 DMA is a line in the sand institutional investors use.

Hence, the expected buyers at 254 (its 200 DMA) did indeed come in.

Meanwhile, our antique military bush helicopter that was sent to rescue the bulls at the top of the tree, crashed to the ground with few survivors.

Now that 254 is holding, can the bulls salvage themselves and an old helicopter?

The biggest issue for this week will be whether the test and the bounce from SPY’s 200 daily moving average holds.

After all, the first time a technical point gets hit, is not always the charm that a third test often turns out to be.

Checking in with the Modern Family, I go with our Wonder Woman, Semiconductors first.

SMH came darn close to touching the 200 DMA. However, it confirmed the breakdown of a key weekly moving average that until last week, held since November 2016.

Late on Friday, I read that block call option buying came to buy SMH.

That makes 92.75 (the 200 DMA) key support and 100.10 key resistance.

Biotechnology (IBB), in a Distribution phase and much weaker than his superstar sister, held last November’s low at 100.68. Biotech, as the premier speculative sector, now needs to prove itself again.

We are not expecting IBB to fly like a new fandangled helicopter, but an old relic with a facelift would be nice.

Clearly, SMH and IBB represent the strongest and the weakest sectors of the family.

Gramps Russell 2000, also touched down on the 200 DMA. IWM had huge volume and a possible reversal pattern.

Granny Retail (XRT), retested last Monday’s low and bounced along with everyone else.  Also a major key, Retail, if holds 44.00, will help shaky consumer confidence and the overall market.

Then, there is Jim Rogers, dubbed legendary investor. He came out last Friday, for the second time since November, to say that “When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime.”

He’s focused on debt concerns. And he favors putting money on emerging markets such as Japan, China and Russia.

Personally, I prefer Latin America (ILF) still in a bullish phase. Looking forward, should inflation set in, those countries are rich in raw materials.

The historic helicopter will most likely never fly the same way again. Therefore, as a pilot, my trading plan remains the same-lighten up on equities, watch the US dollar and interest rates. Plus, buy commodities once the dollar breaks back down under 23.50.

S&P 500 (SPY) 267.20 is the weekly chart breakdown it held for 15 months. If it can clear, we still have lots of resistance. If cannot clear, I suspect more sellers will appear. Subscribers: Negative Pivots in all

Russell 2000 (IWM) 152 major overhead resistance. But, the longer it holds 144 the better.

Dow (DIA) 245.50 is the exponential MA that if it cannot clear most likely means selloff not over.

Nasdaq (QQQ) 158.00 is the weekly moving average that has not seen a week close below since November 2016. 155 pivotal.

KRE (Regional Banks) Confirmed warning phase. 60.54 the 50-DMA to clear back over

SMH (Semiconductors) closed up 3%. Now, 100 is key.

IYT (Transportation) 184.50 pivotal resistance

IBB (Biotechnology) Held the November lows and close defending the 200 DMA. If 100 breaks you got one monster bear flag on the weekly chart.

XRT (Retail) 44.25 the weekly MA support held by the end of day making 46 next point to watch

GLD (Gold Trust) 123.90 holding the moving averages location. This is in a bullish phase-if clears Friday high worth a shot

USO (US Oil Fund) Oversold-back on watch

TAN (Solar Energy) 22.00 a good place to hold

TLT (iShares 20+ Year Treasuries) Seems this is still bound to go lower

UUP (Dollar Bull) 23.50 is the 80-month MA and pivotal

ILF (Latin America): See notes

CORN (CORN) 17.10 pivotal