As I did my research on stock setups, it seems that the move to the downside in the current bull phase, as long it holds, has more correcting to do. The island top confirmed in S&P 500. The last time that happened was on July 7, 2011. SPY broke the 10 DMA and could not hold above Friday's low. Therefore, unless we see the SPY clear today's high and keep going, the trip to the 50 DMA would keep the phase intact, but do more damage while providing the patient with a good low risk buy opportunity.
S&P 500 (SPY) Subs: Unless this clears the 10 DMA, respecting that island top
Russell 2000 (IWM) Better looking since it held the fast moving average. Over today's high would be positive, but under the moving average, would really not want to be holding too much on the long side Subs: R1 and today's high line up. S1 and today's low also line up
Dow (DIA) Although looking better than most, it seems more likely to see 141.50 before it sees new highs
NASDAQ 100 (QQQ) Closed above 68.00 mainly due to AAPL's rally. As the one index closest to the 50 DMA, 67.50, ironically, may be the one to go to first if can clear today's high
ETFs:
GLD 156 is good resistance and now, under 153.50 is the place to look for a new short Subs: White cap trade if breaks S1 using today's high as a risk for short
XLF (Financials) Hanging onto the fast moving average, but looks like for dear and vulnerable life. Subs: Got out of the long today since the market is heavy and this barely held the 10 DMA. However, a move down to 17.84 would be where I would look to reenter.
IBB (Biotechnology) Could drop to 148 and still hold phase. Right here, looking heavy with market.
SMH (Semiconductors): 34.70 is the next support level. Subs: Possible we can see this break the 50 DMA yet hold around 34.50. Aside for now
XRT (Retail) Best looking one besides transportation. Question is can it hold if the market continues south. Subs: 69.00 is major support
IYT (Transportation) Would feel a lot better if this can move back to108 then hold there for a new and less riskier buy opportunity. Subs: Cashed out today with a small profit on the balance
IYR (Real Estate) Possible top on 03/06.
USO (US Oil Fund) Range expansion day and holding the 200 DMA. Subs: Staying away now since has a gap overhead it hasn't filled and is a bit volatile
OIH (Oil Services) If holds the 50 DMA could still be an interesting basing setup Subs: 2 weeks left to see if this can close over the 80 monthly moving average 43.76.
TBT (Ultrashort Lehman 20+ Year Treasuries) Landed on the 50 DMA and needs to hold here
XOP (Oil and Gas Exploration) As one of my favorite sectors this year, now stalled at the top of a trendline going back to 2008.
XHB (Homebuilders) Still has to clear 30.00
UUP (Dollar Bull) We are back to watching this clear the 200 weekly moving average.
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:
OI Held the 10 DMA making today's low max risk. Still has to clear 27.28 to get to new highs-featured on today's video
EMN Today's low lines up with the 50 DMA. If that holds and this can keep above the pivots, not a bad one from possible move to recent highs
P Has 3 days under pivots with max risk 13.50 and move over R1 lined up with today's high
CIEN If today's low holds and this clears R1, could see resumption of move up
CVX Max risk today's low with roll down to S1 and must clear today's high and R1.
STX The 10 DMA about to cross the 50 DMA. If holds today's low, over todays' high also crosses R1
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)
*NOTE: Some of the picks like SPLK APC PRU PX which were in this category-now have 1 day under pivots which eliminates them from this category yet they do not qualify for Category 1 or 2. That means, with one day of negative pivots, not of interest unless they clear R1.
GME Peeking out of the trendline from the highs. Has to hold now around S1 25.32
OSK 40.20 good risk and one push could go onto new highs
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
AOL Oversold and tested but held the 50 DMA making today's low max risk. Has to clear today's high which lines up with R1
LBTYA Similar to AOL oversold on the 50 DMA and has to hold today's low cross R1.
Phase Change: DE As long as this holds 90.75, I would continue to look for a buy opportunity. RAX Confirms slingshot but given nature of market, looking at 52.00 a good risk point DDD Touched the 200 DMA with possible slingshot which means has to confirm by clearing today's high and R1 and hold today's low MJN Converging moving averages and featured on today's video. Between 73.00 and 73.60 is the area to hold. Would watch for a reversal top control risk NTES Inside day and tight risk to under Friday's low 49.85. Positive pivots as well
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
NOTE: LULU if short, collapsed in the aftermarket and I highly suggest you cover some if still there when you read this
COH Broke the 10 DMA yet still above the 80 monthly. Look for max risk 49.50 level
NOV Inside day. 69.75 is the 50 DMA and max risk should this break S1.
MHP Got short on OR high failure and will look to add id cannot clear 48.60 and fails 48.00. Bear flag starting to break with a second day confirmation.
Bye for Now!
