Open Trade Update
Existing Position: OIH (44.89 average price of entry) Full Position
Position: Long
Current Price: 44.36
Stop: 42.57
Target: 50.00-53.00
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Existing Position: SMH Long 35.02 (1/4 position left)
Current Price: 37.93
Stop: 35.79
Target: Holding ¼ position longer term-no specified target yet
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Existing Position: XLF 1/4 position left
Current Price: 19.71
Stop: 18.47
First Target: Met and now have 8 ATRs
Second Target: Met at 20.00 -have ¼ position left
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Market Analysis for Trading on 5/24/2013
Not Even Japan’s 7% Drop Could Scare Our Bulls.
Wednesday all 4 stock indexes experienced one of the ugliest reversal days the markets have seen in years. Then overnight, Japan’s equities sunk 7% due to weak economic data in China. The weight on our markets was clear as they gapped lower by about a 1% to start today’s session. All this negative pressure was digested calmly by all 4 indexes in the first 30 minutes of the day, and then the bulls got to work grinding the markets higher. For today the bearish storm seemed to have subsided, but we still can’t ignore high volume reversal day on Wednesday. The markets closed with nice volume green candles, but two days with one closing near the high of the day does not sound like convincing correction after such a big run up over the last month. Friday before the long weekend will likely have very light volume, and as a result, the markets couldeasily continue in the direction of the main trend - up. I’d look for resistance in the areas of Tuesday’s trading and support at today’s lows. Next week we’ll find out whether or not the correction has really been contained to 7 hourly bars on our charts.
S&P 500 (SPY) After gapping lower this morning (as all indexes did) SPY closed green but under the 10 DMA. Subscribers: Negative pivots in all indexes and confirmed yesterday’s slingshot high.
Russell 2000 (IWM) Held S1 on the gap lower this morning and closed green just below the 10 DMA. 98.09 is the point to clear.
Dow (DIA) Also gapped lower this morning but, closed above the 10 DMA.
NASDAQ 100 (QQQ) Gapped lower this morning and tested, but failed, the 10 DMA Subscribers: Now below the weekly Bollinger Band.
ETFs:
GLD Inside day. The 10 DMA is overhead resistance at 135.02.
XLF (Financials) Confirmed yesterday’s slingshot high. Closed one tick under the 10 DMA.
IBB (Biotechnology) Failed the fast moving average. Gapped below the 179 level that was mentioned yesterday but closed decisively above it. Subscribers: First needs to clear the 10 DMA at 181.90.
SMH (Semiconductors) Held the gap from 5/2.
XRT (Retail) Confirmed yesterday’s slingshot high and closed above the fast moving average. Subscribers: 78.47 next level to clear.
IYT (Transportation) Correcting but, held the gap made on 5/7.
IYR (Real Estate) Confirmed the nasty slingshot from yesterday. Tested and held the 50 DMA, which is still sloping up.
USO (US Oil Fund) Also gapped lower this morning but climbed back above the 50 DMA. 33.67 the 200 DMA is the next resistance.
OIH (Oil Services) Another ETF that gapped lower this morning. Started to climb back but still under the 10 DMA.
TBT (Ultrashort Lehman 20+ Year Treasuries) Took out yesterday’s high but closed below. Held the 10 DMA.
XOP (Oil and Gas Exploration) Held the 10 DMA, still very friendly to this sector longer term.
UUP (Dollar Bull) Inside day. Through 22.95 see more upside.
Bye for Now!
