Be it for me of all people (having had more faith in this bull run than most) to give you a giant head's up; but, the small caps-which led the charge right out of the gate January 2nd, closed red with an inside day. Could mean absolutely nothing more than small caps take a holiday. It could also mean an early warning sign if they continue to break Tuesday. Otherwise, if you are in the right group (been a major key to money management for quite some time now-group/sector rotation) today was a wonderful extension of the bull market 2013!
S&P 500 (SPY) 2007 peak high 157.52 with 153.35-65 the major underlying support and very high RSIs Subs: Positive Pivots in all indexes
Russell 2000 (IWM) Inside day. Subs: 93.75 the high Friday and today. But under Friday's low might look at TWMs as a hedge
Dow (DIA) Not sure it can go up much more from here without a correction. Then again, something overbought can get more overbought
NASDAQ 100 (QQQ) AAPL jumped helping this index. Now, last week's high good point to clear if for real
GLD Inside day Subs: Possible double bottom, dormant intraday-watch this for a move over 153.50 under 152.
XLF (Financials) Weekly chart shows more upside is very possible. The daily chart shows that this is a strong uptrend but a bit overbought. Subs: Took 1.5 ATR on 1/3 the position from 17.96 and will play it out from here
SMH (Semiconductors): Now it's all about 36.00 Subs: Got my low risk entry today on the opening range reversal. Long from 35.38 and will stick if the 10 DMA continues to hold
XRT (Retail) Almost an inside day after its nice pop last week. Still looks good
IYT (Transportation) Through 110, who can argue?
IYR (Real Estate) Had an inside day stalling the correction from last week. Eyes here for either more weakness or resumption and catch up move higher Subs: Held the 10 DMA and still big eyes here for a rollover if the market corrects
USO (US Oil Fund) Looking like a near-term bottom has formed. Subs: In candle language, an outside day. 33.00 is pivotal and a place to look to buy against
OIH (Oil Services) Closed red but above the fast moving average-now the place to hold Subs: We are back to watching the 80 monthly moving average
XLE (Energy) Has to clear the top in place form early February.
TBT (Ultrashort Lehman 20+ Year Treasuries) Inside day and well-deserved after last week's action
XHB (Homebuilders) After a 2 day correction, ends last week with a doji day and begins this week with an inside day.
UUP (Dollar Bull) Falling back from 200 weekly moving average.
EWI (MSCI Italy Cap Index) Subs: Inside day so still sitting long
Longs: On categories: Gap higher days we go to all categories and choose ones with lowest risk that break the opening range. On weaker days, we look at Category 3, especially if the picks hold S1, previous day lows or a major moving average and have a good risk on the reversal. The difference between Category 1 and 2 is the stock condition-a Condition 1 is strongest stock and more likely to make a parabolic move.
Note: Anything that is on this list is a candidate for a swing trade-(of course market condition is a factor) -use the max risk mentioned along with an opening range stop using fudge factor and time confirms. I suggest you decide on 1 or 2 that have a risk you like and then position size accordingly.
Category 1: (Aloha) Positive Phase, Condition 1, 2 days under the FTPs, Risk to Previous Day low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:
ROK Underperformed so watch for strength through Friday's high-inside day today
SRPT 2 Inside days and good risk to Friday low with move over today's high lining up with R1.
MSI 3 day correction with the 10 day moving average to hold at 62.35. Today's high and R1 line up. Is a 2013 pick
GS Inside day. If it holds today's low that is right on the 10 DMA. Then through today's high should resume move
Category 2: (Pipeline) N/A
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy a opening range breakout or candidate for Opening Range Reversal, with Risk S1 or previous day low, whichever is lower unless noted differently, Target- Day to at least 3 ATRs from entry: (Opening range reversals are good on anything above S1)
EXPE Long and looking for 66.00 as next target then 68.00. Today's low good risk
RDC 34.50 now good point to hold if can clear 34.80
EL Inside day. 64.90 area should hold and through 66.03 R1, could make a new leg up
HLX Inside day. 23.25 max risk and like over today's high
CBL Small stock but holding the 10 DMA, crossed the 80 monthly MA and if clears 22.94 could see move to 2007 prices.
APC Now would like to see this clear 83.75-tried but has to close there too
SLB Needs to clear 78.00 and hold 77.40
Category 4: (Rip Tide) N/A
Phase Change: X Has to hold around 20.58 Resistance at the 200 DMA for now. Seems dormant but holding on CNQ Has to hold 30.60 now to stay in play GDX Sold SLW today and now looking here instead since did a lot better and is way oversold on weekly RSI. Had an inside day so will look to buy over today's high. DE Confirmed bullish phase and has room to 94.00 DO Has resistance at the 10 DMA, but overall, looks like it is bottoming. Watch for 68.00 to hold FB As long as 27.58 holds, watch for a move over the 50 DMA
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
WLT Max risk today's high and could retest the recent lows 29.25
TOL confirmed warning phase and inside day. Under today's low good short with risk to 35.33 the 50 DMA.
BIDU If fails 90.23 R1 will look at a new short
NOV Sitting on the 10 DMA although the entire chart looks heavy. Max risk today's high
Bye for Now!