Open Trade Update
Existing Position: SMH Long 35.02
Stop: 32.74 (Lowering stop again from this morning's email)
Target: 40.00
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Market Analysis for Trading on 4/18
From Tuesday's Daily: "With everything posting inside days, that makes Wednesday's trading range possibly the most decisive of the week." With now 3 substantial distribution days in volume (when the volume exceeds the volume from the day prior with a negative close), that is certainly fair warning that the hump day decisive action is for more downside. However, just to make the technical picture more interesting, NASDAQ closes below the 50 DMA, the Small Caps confirm the warning phase, and the Dow and S&P 500 remain in their bullish phases. Interest rates dropped, gold put in a second inside day to Monday's large trading range (not much of a bounce) and the earnings season is starting to cook.
S&P 500 (SPY) Although what first looked like a possible divorce from the small cap stocks, now looks more like just a trail separation. In other words, the divergence from small caps to larger institutional names remains, but eventually, even the strongest fall if the pressure is too great. Subscribers: 154.29 is the 50 DMA. It also held the channel I have been featuring on the video. If we get a bounce-first place to look. I am also now switching gears to more individual names rather than the sectors/groups as best for any new trades. Very little exposure to the market here-cash main position.
Russell 2000 (IWM) 88.79 the last swing low from February 26th. But with this now in a warning phase, unless it gets a monster move back over 92.00, seller of rallies is more prudent
Dow (DIA) Holding up better than some, but unless it clear 146.50, it could get hard down to the 50 DMA at 143.10
NASDAQ 100 (QQQ) Unconfirmed phase change to warning.
ETFs:
GLD 2 inside days now with a meager bounce from Monday's sell off. But as this continues to drop, there are support levels-next one under 130 is 128.
XLF (Financials) Hung onto the 50 DMA by a thread. 17.77 most recent lows.. Without financials, the sentiment will remain negative. Over 18.20 would bring renewed life
IBB (Biotechnology)Best shot to carry the ball if crosses 168. Otherwise, can drop back to 156 area pretty easily
SMH (Semiconductors) Unconfirmed return to warning phase. I still see this area as one for future growth. Looking to see if can hold 33.50 now. Subscribers: Stayed with the long position-only lightened up a bit on the position size
XRT (Retail) Another area that has to participate since a direct measure of consumer confidence. The 50 DMA is just below 69.20
IYT (Transportation) 104.40 is recent support and if holds 105 level, could still be a buy. Subscribers: A channel that took 6 years to clear, hard to believe in 3 months, will be negated. But have to be patient
IYR (Real Estate) FED says recovery fueled by housing sector. This better hold up over 70.50 or not very roseate
USO (US Oil Fund) Not seeing any signs yet of bottoming
OIH (Oil Services) Subscribers: There is channel support at 39.00 level will be watching
XLE (Energy) Hit the 200 DMA Subscribers: Returned to a trendline breakout on the monthly moving average and holding the 200 DMA-will be watching for more signs that it can hold here
TBT (Ultrashort Lehman 20+ Year Treasuries) Still holding the slingshot low Subscribers: Broke under my stop but then closed better. 61.20 is a place I am watching before reentering
XHB (Homebuilders) 28.00 key support
UUP (Dollar Bull) 22.60 is the weekly moving average
SGG (Sugar ETF) Subscribers: Sugar futures over 18.10 will bring an unconfirmed phase change to recovery-what I am waiting for
Bye for Now!
