Friday ended the week as anticipated with a sell off after the S&P showed signs of fatigue late Thursday. Plus, there was a second distribution day in volume. NASDAQ fell to test the fast and 50 day moving averages and held. Now, will be watching to see if the market holds Friday lows, perhaps consolidates and heads back up (phase bullish); or, gaps under Friday low in which case, there will be another washout of longs until the market begins to look oversold. With Biotech correcting, Retail, Transportation and Real Estate holding, we will look there first for confidence restored.
Earnings season kicks off on Monday with Alcoa (AA) first in line.
Subs: Pivots on indexes negative-watching R1
S&P 500 (SPY) Held 134.85 the low of the gap higher to the tick! Gap lower and looking at 134 then 133 next. Holds, over 135.90 and a move to 136.29, the gap from Thursday's low is likely first test.
Russell 2000 (IWM) Holding up well and far from its support area at 78.56 or the gap low from June 29th. Could be attracted to that low, but if not, over 80.85, a positive sign to start the week.
Dow (DIA) Range to watch 127.96 to 126.65.
NASDAQ 100 (QQQ) As mentioned above, held the fast moving average. If continues to hold should see some renewed buying. Otherwise, 62.20 next major support area
ETFs:
GLD Over 154 could see another attempt at higher prices. Otherwise, bear flag could be forming.
XLF (Financials) 14.40 support held marginally. Back above 14.55 looks better otherwise, will be cautious for the time being
IBB (Biotechnology) After an inside day, dropped with the market on Friday. A correction not a bad thing, unless it breaks 130.
SMH (Semiconductors) Not only filled the gap from 6/29, but also broke the 200 DMA again. Question now is will this be a third low higher than the last 2 swing lows?
XRT (Retail) Has room to 58.90 and will still look good
IYT (Transportation) Good sideways action for now
IYR (Real Estate) Did not end the week above 64.90, therefore could see more correction. Next best support 63.35 then 62.50
USO (US Oil Fund) Next support 30.95
OIH (Oil Services) 34.90 important support to hold and over the 50 DMA resistance a key to what happens if that does hold
XLE (Energy) Watch the 50 DMA which corresponds with Friday's low
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.
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:
BUD 76.52 is the gap low and 75.54 the 10 DMA. I like 77.33 Friday low as tightest risk if holds over the FTP at 77.71 and then clears R1 78.08
CYH 4 day correction with the 10 DMA max risk at 26.58 and ended the week with an inside day. Like to see the FTP hold at 27.19 along with Friday low and clear R1 27.50 along with Friday high Reports 7/26
EQIX Reports 7/25. Max risk Friday low. Has to clear 174.07 the FTP then R1 176.65.
HCA Reports 7/30. 4 days under pivots and max risk Friday low and the 10 DMA at 28.12. Must also clear 28.63 R1 and Friday high
SGEN Has to hold 25.50 and clear 25.70 then Friday high
Category 2: (Pipeline) Positive Phase, Condition 2-3, 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: 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:
HD Reports 8/14. Has to hold Friday low. A close above 53.01 will be a new multi-year high close
PPG Reports 7/19. Like to see 105 area hold and has to clear 106 to get real interesting-pivots slightly negative so must also hold S1 for OR Reversal candidate
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 1-4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
DISCA 3 days under pivots with good risk to Friday's low and max risk the 50 DMA51.68. Should clear 53.05 the FTP then R1 53.62 which will return it to a condition 1.
Phase Change, Positive Pivots: EQR Really has to clear 63.50 for a leg up ahead of earnigs 7/25 and hold 62.90 AGP 5 days under pivots. 64.05 now a great risk if it takes out the FTP at 63.95 then R1 65.02 TSLA DOJI day and holding an accumulation phase which means 30.80 max risk and point to hold or could consider short YUM Like to see 64.20 hold. Positive Pivots P Inside Day. Has to hold Friday low. Positive Pivots
Shorts: Typically, I do not list those that have any RSI under 15.00
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
FIO Should not clear 21.52. Has room to 19.95 area
GDX Hit hard on Friday and must not clear 45.15. Could see another test or recent lows 42.60
RL Should not cross 147.25 and support to break now is the 10 DMA at 141.65
RRC Cannot clear 61.82. Could be forming bear flag which breaks under 59.30. Reports 7/25
NKE Inside day and cannot clear 92.13.
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day's lows
NUS 8 days up and right against the 200 DMA. Cannot clear 49.15 and should fail Friday low.
Bye for now!