Friday was a mixed bag of pivot stack condition in if you included KRE and XLF which were positive along with the DIA. Everything else had negative stack. Before Friday is forgotten, I'd recommend taking note of these two important events for future reference.
1. The DIA was the only market watch chart with positive stack. When it rolled over to create a short OR reversal it was below its pivot. Moral of the story is, that is a negative.
2. When the markets where rolling over for their second short OR Reversal, the financials were taking out their lows of the day! Major divergence.
Monday will begin with all negative, and the IWM and a new closing low relative to the 2 month daily consolidation we've been watching. And the Q's closed below their channel low and daily swing low.
For a more detailed analysis of the big picture make sure you watched Keith's video in his weekly Market Outlook column.
For our day trading approach, this means everything is negative:
In short momentum is picking up on the down side with only the daily swing lows to trust as reason to believe the market will stop going down.
With everything being negative, short OR reversals and OR breakdowns that are not extended should be the priority. If the market comes in significantly lower we may need to break the rules and fade it if we have support to lean on. But if a lower open is below key support, I would not fade it, I play the breakdown.
Focus List Long: I'd favor the positive stack stocks. If the market has a strong day the other are in good spots to rally from.
Positive Stack
AMT
KMB
ED
KSS
Negative Stack
CHRW
ORLY
CBST
CL
KSS
FE
COL
IBM
CELG
RHT
FDO
TIBX
COL
JCP
Focus List Short: Many look over done, but if the market breaks down they could get hit hard for a day trade. But because they are at low level inflection points they could also bounce strongly so don't fight an up day in them.
SQM
VRX
VRSN
BIIB
GOOG
TZOO
CAT
DO
GS
BDX
CLF
JOYG
NFLX
OPEN
WLT
RIG
SQM
VRX
VRSN
