I want to call this a boring, low volume correction, but really, only some of the sectors and groups did some correcting. The indexes except for a smidgeon red in the DIA and Russell 2000, closed green. In bull markets, it’s not unusual to see corrections in time rather than price. It’s also not unusual to see divergence emerge in the varying groups. For example, Biotechnology, the sweetheart of 2012 and thus far 2013, did extremely well. Semiconductors finally settled down a bit along with Transportation and Retail. With earnings season winding down, the focus should continue to be on the FED’s future policy pertaining to easing up on the Quantitative Easing, the US dollar and interest rates. Otherwise, the start of the week has put the financial sector in the spotlight, particularly JP Morgan which closed up 1.5%.
S&P 500 (SPY) Eked out new highs but also worked off some of the near-term overbought conditions. Subscribers: Positive Pivots
Russell 2000 (IWM) 97-98.00 (got real close to today) reasonable target if holds 95.00. Subscribers: Pivots Positive
Dow (DIA) Inside day with 152-53 resistance with gap low from May 06th crucial point to hold. Subscribers: Pivots Slightly Negative-R1 important tomorrow
NASDAQ 100 (QQQ) 74.00 still a target but no reason 77-80.00 not in the cards unless this crashes from 71.80 Subscribers: Pivots Positive
ETFs:
GLD Inside doji day.
XLF (Financials) After 2 inside days, this cleared Friday’s high making a new high 19.35 before settling just below. Subscribers: 19.38 is the 80 monthly moving average
IBB (Biotechnology) Whoa! Has 100% overbought on the weekly relative strength indicator.
SMH (Semiconductors) Corrected today. A move down to 37.00 would be good for a new entry
XRT (Retail) Minor correction after strong retail numbers early Monday.
IYT (Transportation) 112 would be a good place to see hold
IYR (Real Estate) Consolidating with housing starts coming up later this week Subscribers: R1 did not clear yet
USO (US Oil Fund) Inside day. Subscribers: Over today’s high might be compelling
OIH (Oil Services) Inside day. 45.12 is the 2013 high and if clears, a very bullish sign Subscribers: Looking to add to the already long on strength
XLE (Energy) Inside day. Through 81.00 also has huge potential
TBT (Ultrashort Lehman 20+ Year Treasuries) Confirmed bullish phase.
XOP (Oil and Gas Exploration) 60.00 resistance Subscribers: Held the 50 DMA and now needs to get through 60.00. Plus has to break the pattern of lower highs since the peak in March.
UUP (Dollar Bull) Now, 22.69 the 2013 high has to clear.
SGG (Sugar ETF) Subscribers: Broke 61.76 but closed above and 17.00 in the futures held so still in play
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
NOTE: KSS reports May 16th
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:
CVX Inside day. 122.11 good risk and like this over R1 and today’s high
NTES 57.25 max risk with R1 and today’s high lining up
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)
OI Gave us an opportunity to buy the opening range reversal, but didn’t clear the pivots until the end of the session. Now, over 28.50 should continue up
MUR Inside day. The 50 DMA 62.07 maz risk and over R1 clears today’s high
MJN Now, 80.00 has to clear so don’t mind buying strength
TRIP 53.68 the 10 DMA good risk and would like to see an opening range reversal
BEAM Nearly an inside day which means over 67.65 should continue but has to hold 66.86 best risk
Category 4: (Rip Tide) N/A
Phase Change:
JPM Good job here today now has to clear 50.00 hold 49.15
AWAY Closed over the 10 DMA making today’s low the new risk.
AEM Held the slingshot low. Inside day. Like that 31.35 is the 10 DMA that will clear today’s high
GS Closed right on today’s R1 149.63. Now, has to clear then 151 to get this really going”
USG Unconfirmed phase change back to warning but with positive pivots which means provided 26.25 holds, back over the 50 DMA has a good chance. A 2013 pick and still see potential to 35.00
AAPL Inside day. 450 is max risk as it now corrected from the recent move and over 455 will look better, over 460 better still
PHH One to watch back over the 200 DMA and R1. It held the 200 weekly and 80 monthly moving average which means a good setup would lead to a swing trade
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CNQ Today’s high max risk with 29.00 an area to break to see lower prices
CHRW has to break 56.00 and not clear 56.50. Then, could see 52.00
Bye for Now!