Note: Market continues to try to find its footing and with recent volatility, we remain mainly in cash until we see a long term trend emerge.
Open Trade Update
Existing Position: GE Long 23.86
Current Price: 23.19
Stop: 22.29
Target: 27.00 (first target for ½ off) Lowered
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Open Trade Update
Existing Position: SGG Long 60.90 (1/2)
Current Price: 59.60
Stop: Stopped out
Note: Why we took ½ position-lost less than one ATR
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Market Analysis for Trading on 7/1/2013
Not all too surprising, the market retreated from the 4 day rally, which followed the harder and more volume-packed 4 day decline thus ending the week in warning phases in all but the Russell 2000’s (small caps) which actually confirmed the bullish phase. Although the bonds rallied, the dollar steadied. It seems from a fundamental and practical standpoint, the market is beginning to price in the eventual tapering by the FED probably by September’s meeting. Ultimately that will mean some more divide in how the varying groups/sectors respond. Semiconductorsclosed confirming a reversal from an 11 year channel. With that technical pattern, expect to find good long term opportunities in that group. Retail should be fine and financials also closed out the quarter well-another area to watch for buy opportunities. Otherwise, Real Estate, Homebuilders, Oil Services, seem most vulnerable for the time being. And gold (GLD) after pointing out the 2-day surge in volume last Wednesday and Thursday, opened Friday on new lows and reversed. Textbook my friends! For this week, with an ensuing holiday, expect the S&P 500 to be range bound. Support around the 157.50 mark, resistance around the 161-162.00 area. Friday, the US market wakes up to the unemploymentreport.
S&P 500 (SPY) Subscribers: Pivots are negative making the bias to the downside unless it clears R1.
Russell 2000 (IWM) Confirmed to a bullish phase with 2 notable technical patterns. First, the high on Friday failed to fill the gap left from June 19th’s big reversal candle. 98.16 is that number to clear. Second, the 50 DMA at 96.50 becomes critical support.Subscribers: Pivots only slightly negative.
Dow (DIA) A perfect retracement to the 50 DMA and retreat on Friday. Could be the end of the dead cat bounce, could be more range bound as with SPY between 146.50 and 149 Subscribers:Pivots negative.
NASDAQ 100 (QQQ) What started out on Friday as weakest, had the best close. Therefore, look to this index for signs of strength Monday morning with the 50 DMA at 72.12 to clear and close above. Otherwise, 70.00 is the underlying support. Subscribers: Pivots slightly negative.
ETFs:
XLF (Financials) A couple of good aspects to this chart. One is the close over the 50 DMA and more importantly, the monthly uptrend held up after a huge decline. Subscribers: 19.20 is key support and would consider following a move over Friday’s highs.
SMH (Semiconductors) Interesting bullish engulfing pattern with a strong close ended the week. 37.70 is the 50 DMA to clear once and for all. 37.15 good gauge of support. Subscribers: Eyes here on the financials
XRT (Retail) Another group in good shape. 76.00 key support and if can fill and hold the gap over 77.85, very strong Subscribers:Another group to watch.
IYT (Transportation) 108.20-108.65 an area to hold. And, the 50 DMA is the area to clear
IBB (Biotechnology) 170 has to hold and eventually, 176 to clear
IYR (Real Estate) Here’s where we have to watch to see if the prospect of tapering by the FED can be absorbed without too much further damage. A good start would be a move over the 200 DMA
XHB (Homebuilders) 29.29 is a key area of support to hold if this has a shot of gaining traction. Therefore, another area besides real estate looking more vulnerable for the short to intermediate term
GLD Volume, volume, volume. 2 days worth before putting in a bottoming pattern on Friday-again with huge volume. Subscribers:Also held the 80 monthly moving average. I expect more bounce from here with first level of resistance 125. Support now 116.
USO (US Oil Fund) Could not fill the gap from the island top. A bit volatile here but maintaining the bullish phase
OIH (Oil Services) New month, new eyes to watch 43.80 the 80 monthly moving average
XLE (Energy) 80.80 is ultimately the point to clear. Otherwise, still looks vulnerable
XOP (Oil and Gas Exploration) Aside here for now
TBT (Ultrashort Lehman 20+ Year Treasuries) 3 day fairly significant correction, with 71.55 the gap low place to watch for a hold
UUP (Dollar Bull) 22.42 is place to hold. Cleared back over the 200 weekly moving average as well.
SGG (Sugar) Although the stop was hit late day Friday, if this maintains itself over 57.50, I will continue to watch it for a change to recovery phase
Bye for Now!
