Evening Watch List for May 16th

Mish Schneider | May 15, 2012

Biggest clue Tuesday was that S&P 500 (SPY) could not clear previous day high. Nor could DIA or IWM. NASDAQ (QQQ) made a bold attempt with early strength from AMZN, GOOG in particular, but AAPL gave it up the last hour of the day, breaking last week's low. No phase change from warning, but certainly no sign of bottoming action either.

S&P 500 (SPY) 132.75 next support area against the exponential moving average as it continues in oversold territory

Dow (DIA) Really oversold daily RSI

NASDAQ 100 (QQQ) 63.23 is the low from March 6th when it left a DOJI island bottom. Could well gap under but with RSIs extremely oversold, would not look to short, rather, wait to see when signs of bottoming action emerge

GLD 148.27 last swing low 12/29/2011

XLF (Financials) 14.35ish the retracement to the weekly moving average

IBB (Biotechnology) Until it crosses 126.90, that area could wind up as triple tops

SMH (Semiconductors) if 32.15 holds-then might look here for strength above 33.00

XRT (Retail) Broke the bear flag and now looking at last week's low 58.57.

IYT (Transportation) 91.00 important and still holding-sort of amazingly

IYR (Real Estate) Gave up 63.00 although still in bullish phase. Now looking at the 50 DMA 62.29

OIH (Oil Services) Daily really, really oversold-this is not where I would go for shorts right now

TBT (Ultrashort Lehman 20+ Year Treasuries) Weekly RSIs very oversold

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.

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:

N/A

Category 2: (Pipeline) Positive Phase, Condition 2-3, 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:

GNC Inside and narrow range day. If holds today's low and clears today's high, back to condition 1.

VVUS Inside day. Must hold today's low and clear today high.

WFM Must hold 86.69 and clear the 10 DMA to return to condition 1

Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means candidate for Opening Range Reversal, Risk S1 or previous day low, whichever is lower unless noted differently, Target- Day to at least 3 ATRs from entry:

AOL Really should clear 27.30 but could buy reversal with tight risk

BBBY 70.56 has to hold and now has to clear recent highs

ACE Today's low has to hold and must also clear 76.15 to stick

CERN Could not make it to Condition 1 so must hold today's low

EQIX Improved condition to a 3. Should hold today's low

IBM Provided 196.79 holds for a swing and today's low for mini, good if market firms

SWI Has to hold 43.47 and clear the 10 DMA

Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 1-4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:

LMT Possible slingshot but must hold 84.17

EW Provided 82.21 holds, pivots neutral at 83.73. But ideally needs to also clear 85.00 to stick

MCK touched the 50 DMA, now must clear 89.45 R1

ETN (Not a condition) but very oversold and outperformed market with inside day. Like to see it clear 45.12 the 200 DMA

Shorts: Hard to find stocks not oversold

APKT Must break 24.24

CAVM Must break today's lows

DECK Actually approaching overbought. Needs to break today low as all it has done is rally to resistance

INFY Must break 43.57 S1

CXO Must break 88.10

NSC Negative pivots and cannot clear today's high
Goodnight!