Note: Should be safe to get back into the water-look for a couple of new trades early next week
Open Trade Update
Existing Position: GE Long 23.86
Current Price: 23.24
Stop: 22.29
Target: 27.00 (first target for ½ off) Lowered
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Market Analysis for Trading on 7/8/2013
Frequent and devoted readers: Small caps (Russell 2000s) have been a tell for us for quite some time. Friday, they closed on new highs. But more importantly, as the July 4th holiday gave me time to reflect on the market and its other signs, it occurred to me that the short bonds (TBTs), the US dollar, and the other indexes (although until Friday were in weak warning phases and now all ended the week in unconfirmed bull phases), were sending a loud and clear signal. This “punchbowl” I’ve been reading about is accurate. The slowly recovering economy, positive jobs report, the move towards energy independence, DOMA, Sep-tapering (kudos to that title creator) along with manufacturers beginning to bring their businesses home- clothing industry namely, this punchbowl is full and spiked! We still have the May 22nd highs in the indexes to clear, but heck-pass the ladle!
One note: Monday kicks off earnings season with Alcoa first up.
S&P 500 (SPY) Unconfirmed bullish phase. It still has to fill the 6/19 gap to 163.38 with Friday’s high 163.08. All good unless it fails the 50 DMA from here.
Russell 2000 (IWM) Gun to head this will gap up again Monday and has to clear 100.38 the all-time high as well. If not, watch 98.75 to hold then 98.15
Dow (DIA) ) Unconfirmed bullish phase. 151.05 is the gap low from 6/19 that for real bullish scenario is the area to close above. 150.50 is the 50 DMA to hold
NASDAQ 100 (QQQ) Unconfirmed bullish phase. Has to fill the gap to 72.68. One to watch with AAPL’s red close on Friday.
ETFs:
XLF (Financials) 19.50 pivotal and 20.00 a great breakout.
SMH (Semiconductors) Over the 50 DMA and filled the 6/19 gap. Now, 37.90 key support with the last swing high new point to clear.
XRT (Retail) Next hurdle is the 6/19 high 78.89 but been a great leading sector even when the rest of the market was correcting
IYT (Transportation) So close to 112, the 50 DMA making this really important to watch. It has to clear the 50 DMA or like the Russell’s are for the early bulls, this could be for the early bears
IBB (Biotechnology) Some resistance coming up at 183.60 but well done here! Friday’s low support to hold now
IYR (Real Estate) If there is a sector concerned about rates for the time being, it’s this one. However, still watching for a move back over the 200 DMA as a great indication, that news is absorbed.
GLD This definitely like the notion of higher rates. Did hold recent lows by quite a bit so not writing this off just yet. Subscribers: Has to clear 118.61 R1 for another shot.
USO (US Oil Fund) Overbought now but what a move clearing the 200 weekly moving average first time since September 2012.
OIH (Oil Services) Back to unconfirmed bullish phase. Subscribers: Cleared the 80 monthly moving average at 43.80
XLE (Energy) Cleared 80.00 Still in warning phase however until it clears the 50 DMA
XOP (Oil and Gas Exploration) Unconfirmed bullish phase-needs to clear 60.00
TBT (Ultrashort Lehman 20+ Year Treasuries) Highest level since March 2012. Will be really interesting to see what the would-be tapering really does to rates and the market longer term
UUP (Dollar Bull) Subscribers: Raising stop considerable-and watching to see if can clear 23.00
Bye for Now!
