Evening Watch for Jan. 11th 2012

Mish Schneider | January 10, 2012

The narrowest range day in the Russells 2000 (IWM) in 194 days. Plus, it closed on the 200 DMA with light volume and an RSI- approaching but not quite, overbought. Now in an unconfirmed Accumulation day and first close over the 200 DMA since late July. The weekly moving average is just overhead, still looking like resistance. Bottom line-what happens when the party starts and nobody shows? How long do you wait for other guests? And at what point if they do not show, do you turn around and head for home?

SPY: 3rd Accumulation Day in volume although still very light. 129.42 was the last swing high in late October, which was challenged intraday, but not sustained. Subs-Positive pivots in everything, but if this fails today's low, especially if volume comes in, could look dicey. Otherwise, bias positive.

QQQ: Technically, the breakaway gap on January 3rd is still in play with this index in a bullish phase. Other than complete dullness, see no reason that this sentiment has changed. Subs-Positive pivots at 58.11

ETFs:

XRT (Retail) Closed well although one could pass out from the lack of excitement. I figure that after the big move in biotechnology, this is the best bet as next leader, provided it holds over 52.50 area.

XLF (Financials) At least there was some excitement here as I have been writing about this sector as the best indicator for quite some time. We got a breakaway gap now. Let's see if today's low holds.

IYR (Real Estate) Either this was a hammer candle on low volume and the start of a good move up. Or, it is just sitting on the 200 DMA and one big wind will knock it out of its seat.

IBB (Biotechnology) Still Overbought but first one to take out 2011 highs.

XLE* (Energy) Better volume than yesterday's with the move over the 200 DMA. Has room to the October high 73.17.

OIH (Oil Service) Met the target of 121 with a breakaway gap and closed right there.

Longs: Please make sure you check earnings dates. Picks all with clear risk. NR=Narrow Range

SPG (NR 120) Even though the pivots are positive at 127.79, I really want to see this clear today's high and the 10 DMA. I'm only willing to risk 127.32 today's low. The target for now-131-132.29 and perhaps 135 level before earnings. Day to Short-Term Swing

VHC (NR 15) Negative pivots but, an inside day while it holds the 10 DMA making risk 25.50 max. If clear today's high and R1 27.20, can look at 29.45 last swing high and perhaps 33.00. Day to Short-term Swing

BIIB Negative pivots at 115.12 and 2 days under. The slope on the 50 DMA is down so even though in bull condition, a weak one unless it can get moving. Risk then today's low 114.32. Has potential to 120.70 and possibly to 124 area. Reports in 28 days. Day to Short-Term Swing

EL (NR 16) You all must be tired of seeing this pick. The daily chart beginning to look like a seagull-and so if it takes flight I want to make sure we are on it. Pivots are positive at 112.29. It needs to clear 113 with some gusto once and for all. Risk is 111.40 the 50 DMA. Target 120.00 Day to Swing

COO 2 inside days in a row and 7 days under the FTP. 68.75 max risk. Must clear today's high 70.17 and then 72.20. The longer term trend still up, so could get a good entry and if breaks the 200 DMA, who knows? 2011 high 84.20 Day to Swing

Honorable Mention: Must Now Clear High or R1: (101.18) TSLA* (27.84) Positive Pivots OR Reversal Candidates: DLR* HOG X WSM CVX NBL BA

Shorts:

RHT MUST break today's low and S1 42.64 and not clear 43.25. Then, could see 39.19 December low and lower. Day to Swing

ANF Has slightly positive pivots so must break 44.25 to see another leg down to 41.55 before it gets real oversold. Risk45.73. Day to Short-term Swing

VFC I talked about this one during Phases and Forecasts even though it had an uptrend in 2011. Therefore, this is a bit of a different look at a stock that has a declining weekly Bollinger Band and is hanging onto a negatively sloped 50 DMA with negative pivots at 134.10. If this clears 135.57-DO NOT GO SHORT. But, if it comes in under the pivots and sets up, could be a move down to 130, where we can take a fresh look. Day to Short-term Swing

STJ Reports Jan 25. Inside day so must not clear today's high 36.18 which bumps up against the negatively sloping 50 DMA. Slightly positive pivots which means now must break S1 35.25. Could see 33.50 and lower before it reports. Day to Mini

Honorable Mention: AMZN (Must break 177) WYNN (Must break 106.48) NTAP (Must Break 34.62)

Goodnight!