Super low volume digestion day in the indexes after the exciting conclusion to last week may seem like a letdown. The gaps left from Friday in the S&P 500, NASDAQ and the Dow all held up and for further confirmation of a runaway gap, need to continue to hold up. The Russell 2000 made a new high close which could mean that money is rotating back to small cap stocks. The long bonds continued their decline which hopefully means the reliance on Quantitative Easing to keep the market solvent is abating. Along with small caps, the Transportation and Financial ETFs made new 2013 highs. These are all pointing in the right direction for banking on a continued improving economy.
S&P 500 (SPY) 161.00 good point to hold with 164 target Subscribers: Pivots positive in all indexes except DIA
Russell 2000 (IWM) 94.96 was the March 15th high which cleared. 95.50 is the new point to clear
Dow (DIA) If there is one place now that could be more vulnerable it’s here since a lower low from Friday’s low was made and it closed basically unchanged. Subscribers: Negative pivots so watch S1
NASDAQ 100 (QQQ) Would not be buying up here, but not seeing any reasons for concern if already long Subscribers: 71.91 gap low from Friday
ETFs:
GLD Inside day. Subscribers: Good one to watch for range break either way tomorrow
XLF (Financials) Approaching some longer term resistance Subscribers: 19.38 a target or the 80 monthly moving average
IBB (Biotechnology) Tired after the possible exhaustion gap Friday
SMH (Semiconductors) Got to a top of a channel going back over 10 years, which means a bit of a rest or pullback not out of the question Subscribers: Any dip to 37.00 is probably a good place for this to reignite from
XRT (Retail) Inside day after making new highs
IYT (Transportation) 112.30 was the 2013 high until today. Subscribers: Will look for an opening range reversal against the old high thinking 116 could be next target
IYR (Real Estate) Inside day proving it’s a bit fatigued but does not look done
USO (US Oil Fund) Confirmed the accumulation phase
OIH (Oil Services) 44.00 area a little resistance Subscribers: Say hello to the 80 monthly moving average if it stays firm
XLE (Energy) Made new 2013 high intraday then closed just shy of the old 2013 high 80.14
TBT (Ultrashort Lehman 20+ Year Treasuries) Has a gap to fill to 62.20 so risk/reward not optimal at these levels now
XOP (Oil and Gas Exploration) 58.50 now good support Subscribers: Long ½ position after the opening range reversal and ½ ATR
XHB (Homebuilders) Inside day at the highs
UUP (Dollar Bull) Watching that 200 weekly moving average like a hawk
UNG (United States Natural Gas Fund) Subscribers: Held the inclining 50 DMA but still needs to clear today’s high and R1 to look like a better hold in store
SGG (Sugar ETF) Subscribers: 63.10 is a good place to hold and watching to see if it can clear the 50 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
**NOTE: New and Old Subscribers: I do not include on the list 1. Anything with a weekly or daily RSI over 92 2. Anything within 4 days of reporting earnings 3. Anything with a risk over 1 ATR from its current close 4. Anything with only one day under the Floor Trader Pivots (unless specifically noted. 5. Anything with a potential slingshot or brick wall high (new 60 day high, close in the bottom 25% of the intraday range.)
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:
BWA Inside day so now much more interested over 80.10 new highs for 2013 with risk to Friday low and could see 87.45 the 2011 high
NOW Inside day here too. Over 41.00 looks better with today’s low a tight risk
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)
NTAP Reports May 21st. Today’s low the new point to hold with 36.00 some overhead resistance to clear.
DOW Inside day. Through 34.29 now that is over the 80 monthly moving average, and then another push over 34.80 and could be a good multi-month base has formed
FNP Inside day. Over 21.50 and could see another push to 23.50 or higher with risk S1
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:
PM Sitting on the 50 DMA oversold. Has to clear R1
Phase Change:
URBN Reports May 20th. Has to clear 42.00 and hold 41.00 for a possible bounce ahead of earnings
AEM 30.36 is the max risk here and has to clear and close above the 10 DMA or figure 32.00
ADSK Reports May 16th confirmed phase change to Bullish Needs to clear 39.70 to see 41.00 recent highs or above
KSS Reports May 16th confirmed phase change to recovery but could not clear the 200 DMA. 48.40 pivotal with positive pivots still intact
SWC Inside day with 12.20 a good tight risk. R1 and 12.71 Friday high line up
PETM Reports May 20th. 2 inside days so has to clear 68.20 hold the 200 DMA at 67.39
IR Unconfirmed phase change to bullish if holds today’s low and clears 54.76 after an inside day
Shorts:
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
VRX has to break 73.17 S1 and not clear 73.70
AMZN Although held the 200 DMA (252.47) last week, now if breaks it, see a short with next support 242.00
Bye for Now!