Existing Position: Long EWG 24.70 (1/4 position)
Current Price: 26.77
Stop: 25.77
Next target: With ¼ of the position left, will use a trailing stop
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Existing Position: Long TXN 39.18
Current Price: 39.94
Stop: 37.09
First Target: 42.91 Take ¼-1/3
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Existing Position: GLD Long 119.35 (1/4 position)
Stop: 124.94
Current Price: 126.36
Next Target: With ¼ of the position left, will use a trailing stop
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Market Analysis for Trading on 8/5/2013
Although the market closed up and on new highs, the salient sectors and groups that drive the economy closed weaker making this recent move very difficult to fall in love with. For example, thefinancials, semiconductors, transportation, real estate, oil and energy sectors all closed red. Only retail and biotechnology drove to new highs again, both groups continue to live at the top of the heap. Rates dropped along with the dollar, which means trying to figure out the direction of the market based on that formula (i.e. low rates=strong market) will leave you either on the wrong side or sidelined. Therefore, the best strategy for now is to trade individual instruments each on their own merit and make sure you can step back with a longer term view by noting the phases, risks and potential targets. Otherwise, it’s a scalpers dream!
S&P 500 (SPY) Low volume new highs. No reason to be calling tops if one just looks at how last week ended vis a vis price. Subscribers: pivots positive in all indexes.
Russell 2000 (IWM) Inside day at the new 2013 highs. Always good to watch range breaks on end of week inside day setups
Dow (DIA) Strong looking price action ended the week with this on new highs.
NASDAQ 100 (QQQ) Highest level since 2000 and seemingly on its own fumes
ETFs:
XLF (Financials) Inside day and not yet testing the 2013 high from July 23rd. That candle still suggests topping action until it clears with 20.67 key support to hold
SMH (Semiconductors) After the peak high 7/17, we have a gap overhead and some solid resistance to clear with 38.45 level support to hold
XRT (Retail) Been leading along with biotechnology and one reason that while many hold their breath, going short was not an option either
IYT (Transportation) Inside day at the top of the range from last Thursday which suggests it was just resting on Friday. Has plenty of room to the upside if holds 118
IBB (Biotechnology) my keyboard automatically types out new highs in this group since it has done so many, many times this year
IYR (Real Estate) Might we say a bit oversold now? On the daily relative strength indicator for sure. However, a rally to the 200 DMA may be likely, the key will be to watch for a possible phase change to get excited
XHB (Homebuilders) 31.06 next hurdle and 30.00 key to hold.
GLD 2 Inside days under the 50 DMA Subscribers: Although I scalped and exited, with this setup close eyes on the direction after the inside days here Monday
USO (US Oil Fund) The topping candle from 7/19 remains intact for now with some support at 37.50 now to watch for a hold
OIH (Oil Services) Overhead resistance
XLE (Energy) 84.00 is key
XOP (Oil and Gas Exploration) Another group that has plenty of room for more upside. Inside day Friday.
TBT (Ultrashort Lehman 20+ Year Treasuries) If breaks Friday low probably seals its fate for the short term anyway
UUP (Dollar Bull) Back to a distribution phase unconfirmed
EWG (Germany) Do I hear new 2013 highs soon?
FXI (China) Inside day. 34.50 support in a confirmed recovery phase. Like this over Friday’s high for a move to test the 200 DMA
EWW (Mexico) Subscribers: Got 1.5 ATRs out of this in 2 days and now the 200 DMA is the obstacle to clear
SGG (Sugar) Subscribers: Now, really want to see the 50 DMA hold at 58.23 with support down to 57.93
Bye for Now!
