Monday began with a low volume marginal correction in the indexes and a clear rotation into energy and oil plus a short covering rally in gold. The dollar lost some of its recent strength which certainly helped fuel this rotation into some commodity based instruments. Although the financial sector remains firm, homebuilders, real estate and my darling semiconductors took a rest. Solar stocks also ran up. And in spite of NASDAQ taking a bit of vacation, AAPL came back to life, now looking like it found support with the possibility of further upside if the $450.00 level can clear. All in all, in the overall market, today’s action did not appear to be a game changer; however, a correction is never out of the question after a historical and relentless run.
S&P 500 (SPY) Today’s low is a good point to watch. If breaks, a better confirmation that a correction could be upon us. Subscribers: Positive pivots in all indexes. S1 and today’s low line up
Russell 2000 (IWM) Today’s low is a good point to watch. If breaks, a better confirmation that a correction could be upon us. Subscribers: Positive pivots in all indexes. S1 and today’s low line up
Dow (DIA) 153 is the weekly Bollinger Band-and with today’s close right on that number, certainly one to watch on Tuesday for a hold or failure of 153.
NASDAQ 100 (QQQ) Today’s low, like in the other sectors, is a good point to watch. Subscribers: Positive pivots in all indexes. S1 and today’s low line up.
ETFs:
GLD Defended and held 130.50 the recent low and ran up with a vengeance.
XLF (Financials) At 20.00 our swing position long from April was a good place to lighten up. Keeping a core long though, as unless this breaks the 50 DMA, a correction will look more like noise.
IBB (Biotechnology) After ending last week with a meek inside day holding the fast moving average and not clearing the weekly Bollinger Band, today it sold off breaking under the 10 DMA. 175 next area of support.
SMH (Semiconductors) 38.00 is a retracement to the channel breakout on the monthly chart.
XRT (Retail) Still has to clear 78.47 the high from last Thursday’s ugly looking candle
IYT (Transportation) Under 116 expect some more correction here.
IYR (Real Estate) Got to the tippy top of the weekly Bollinger Band. Like all the other leading sectors, a rest would not be the worst thing in the world if you missed this last boat.
USO (US Oil Fund) 34.50 point to clear with today’s low a good place for support
OIH (Oil Services) Took out the 2012 and recent 2013 high. Should continue up from here if today wasn’t a one day anomaly.
XLE (Energy) Started the parabolic journey last week.
TBT (Ultrashort Lehman 20+ Year Treasuries) The rise in rates is starting to look a bit more permanent with this over all the daily moving averages and holding.
XOP (Oil and Gas Exploration) Broke a trendline on the weekly chart going back from2008 high-great reversal!
XHB (Homebuilders) Needs to clear 32.55.
UUP (Dollar Bull) A possible island top if confirms would definitely help the case of a correction in the dollar generated instruments
UNG (United States Natural Gas Fund) Closed over the 50 DMA and needs to confirm with a second close.
FXI (China) Subscribers: Overall, this looks good back over the 10 DMA
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:
TPX Second inside day with only 1 day under the pivots. If it clears 48.27 would follow it up with risk to under today’s low.
PM 94.66 is the 10 DMA and max risk if clear first the FTP 95.20 and then R1 95.56 which lines up with today’s high
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)
TTM Inside day. Max risk 27.48 with a move over 28.00 and could see 30-32.00 next
LNKD Compressing above 179.25 max risk. Over 185 should bring new life.
EL Inside day max risk 70.38 and has to clear R1 71.93. Not sure of the upside potential since has made a big move already so more miniswing
USG Has to clear 28.60 to keep going
PX Inside day with 115.00 a good place to hold
HOT Still in play but now needs to hold today’s low
FNP Dull today but held where it needed to. 22.25 a good risk now
Category 4: (Rip Tide) N/A
THC Landed on the 50 DMA and oversold. 44.48 is the 50 DMA and risk
Phase Change:
AWAY Bullish engulfing pattern but has to clear 31.10 the 50 DMA to keep going
FDO Good correction with today’ s low perfect risk.
AAPL Unconfirmed phase change to recovery provided the 50 DMA 435.36 holds
AEM SLW both had new slingshot lows if confirm. AEM has to clear 30.07 SLW 23.35
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CTXS 65.74 now the point to break with 67.00 max risk
NFLX 2 inside days with negative pivots. 241.89 max risk and under today’s low could see 227 or lower
Category 6: N/A
Bye for Now!