Quiet session volume wise, but some of our concerns expressed last week, namely overall weakness in certain key areas, gave the market a red day after last Thursday's exciting close. The only sector of the major ones I write about daily that closed green was Real Estate (IYR). The last few minutes of the session gave the market a bounce, which helped the indexes, particularly the S&P 500 and the Dow from closing with what we define as a slingshot high. The market internals remain positive, which is confirmation that judging a trend's health or weakness from intraday swings can chop active traders up. With that said, NASDAQ did have a marginal slingshot high, which has to be confirmed by more weakness tomorrow. And, with Financials, Transportation, Retail and the Short Bonds all struggling, the anxiety of both bulls and bears was heightened this April Fool's Day.
S&P 500 (SPY) Since it held the fast moving average and bounced off of the lows closing above the low from last Thursday, no reason to believe that this market is due for a big hit. Question, is, what will it take to keep the rally going? Subs: Pivots Negative
Russell 2000 (IWM) As a major barometer for quite some time now, the small caps closed comparatively much weaker, but held 93.00, a support area in March.
Dow (DIA) Chart looks ok, but still overbought on the weekly Relative Strength Indicator. However, the momentum even near the highs, has waned. Subs: Pivots Positive
NASDAQ 100 (QQQ) It does seem logical that until AAPL can resolve its issues, NASDAQ will lag. Held 64.45 though which means, not a total disaster if this level holds up tomorrow
ETFs:
GLD 156.80 to 154.00 its established range for now
XLF (Financials) Above 18.30 will renew this sector's pizazz, under 18.00 not so much.
IBB (Biotechnology) Bless its heart-it tried to hold the market up today, but finally gave it up. But, a well-deserved rest more than the top is in
SMH (Semiconductors) Nothing would make me happier than to see this rock out. Instead, it went back into an unconfirmed warning phase. Subs: 35.00 pivotal
XRT (Retail) 70.81 is still a potential double top with 68.00 the underlying 50 DMA
IYT (Transportation) Here is another group that has to stay in the game. 108.69 the recent low to hold
IYR (Real Estate) Strong finish to new 2103 highs. Also an important sector, but can't do the job alone
USO (US Oil Fund) The 50 DMA should be support now after today's correction
OIH (Oil Services) Back to unconfirmed weak warning phase Subs: Did not close over the 80 monthly in March.
XLE (Energy) Correcting but still overall healthy looking
TBT (Ultrashort Lehman 20+ Year Treasuries) Let's see what happens at 64.25-was defended big time in February
XOP (Oil and Gas Exploration) 59.10 the 50 DMA support level Subs: And possibly a great buy opportunity
XHB (Homebuilders) Brick wall at higher levels and now the 50 DMA close by.
UUP (Dollar Bull) Could not close the week above the weekly moving average. About to get a golden cross
FXI (China) Subs: Watch to see if this returns over the 200 DMA with 36.00 a great point of support
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) Category 2: N/A (Typically means the strong stocks have more to correct)
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)
BEAM Bought the reversal today and now has an inside day. Like to see this clear 63.77 recent highs and hold 63.00
LIFE Got in on a reversal and scratched by jumping ahead of the stop. That happens when one watches ticks. Inside day so will be looking at this again-possible even on a 5 min OR breakout
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:
PRU The 50 DMA is 57.92 which if holds a good risk if this can recover
BAC Oversold and holding 12.00. Over today's high lines up with R1
CLR 85.80 is the 50 DMA to hold and has to clear R1 and today's high
Phase Change: MBI Unconfirmed weak warning phase, but held the 200 DMA and oversold which tells me over the 50 DMA 10.30 overdue for a good pop LTD Over 44.85 will change phase and look better for another push up. 44.15 support to hold MBT over the 80 monthly and still looks good over 21.00 COH About to change to a recovery phase if can clear 50 and will look even better if can clear 51.00 BIDU 2 inside days. 86.22 is the fast moving average to hold and over 88.00 could see pop ESRX Held the 200 DMA with today' s. 58.06 takes out R1. FB Held the 200 DMA making today's low max risk and over R1 could get interesting with no real overhead until 28.00
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CHRW 59.52 the overhead 200 DMA and max risk. 57.40 area some support
APA 77.41 good risk and needs to break 75.30 the 10 DMA
VMW Today's high max risk. 2 Inside days now so good one to watch for range break one way or another
Bye for Now!