Evening Watch List for August 6th

Mish Schneider | August 5, 2012

The gap higher and ensuing follow-through during Friday's session on low volume suggests that the intact bull phase, although tested earlier in the week, prevails. But alas, with not that much interest. At least, not yet anyway. The several attempts at 65.31 in NASDAQ 100now become support. Clearly, even the weaker Russell 2000 was able to defend a swing low from late July and run back to safety above the 200 Daily Moving Average. Makes for some real interesting trading alright. It also speaks to the beauty of technical trading, letting the market dictate and leaving one's "opinions" at the door.

S&P 500 (SPY) 139.34 was the most recent high until Friday. Now that becomes some support with Friday's low more important to defend. It's the beset close since May.

Russell 2000 (IWM) How many of you followed this over 77.70? This did get some decent volume. Now, Friday's low big support to hold. 80.00 is the next hurdle.

Dow (DIA) As the best hope coming into Friday, did not disappoint. Now needs to hold Friday low and get convincingly through 131.

NASDAQ 100 (QQQ) Defended 64.00 after 4 days in decline, gapped higher and closed on new 4 month highs.Subs: Has a gap to 66.18. The only signal that would scream extreme caution is if it makes a new 60 day high and collapses for a possible slingshot. Otherwise, dips should be buy opportunities.


GLD Underperformed after it gapped lower earlier in the week. No clear signals just yet

XLF (Financials) Cleared 14.85. If you believe in breakouts, this should now trend higher.

SMH (Semiconductors) Unconfirmed accumulation phase. Unless breaks the 200 DMA will be looking for an entry

XRT (Retail) If all's good in the US economy again, this sector has to get going. Over 60.00 should make that happen

IYT (Transportation) Love this group since it's like the designated driver. Sobering, since it did not cross the 200 DMA.Subs: Must see this clear 91.15 to get more aggressive as a buyer

IYR (Real Estate) 66.10 should cross and hold if going to see another leg up

USO (US Oil Fund) Subs: In from Friday for swing. Confirmed that the recovery phase is real. Now, trading it for the potential to the 200 DMA.

OIH (Oil Services) 40.15 next hurdle and the 200 DMA support to hold

XLE (Energy) 69.40 key support. 70.00 closer near-term support as the gap low from Friday

TBT (Ultrashort Lehman 20+ Year Treasuries) Subs:14.70 should hold and needs to 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.

Pick Criteria: Performed on par or better than the market, is not overbought, has improved in phase and/or condition and to narrow down choices, does not have a negative sloping weekly Bollinger Band.

Category 3: (Double Up)Positive Phase, Condition 1 through 4, Positive Pivots which means caneither 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:

EWW 63.00 now should hold. Still waiting for 63.85 to clear

HMSY 34.17 is max risk and needs to clear 35.00

LEN Didn't perform as well as market, but did cross back above the 10 DMA. 29.80 support and over Friday high should continue

ASML 57.48 max support and has to clear recent highs 59.20

PM New high close. If 91.00 holds, look for reversal. Since uncharted territory hard to predict.

MMM has to clear 92.00 and hold Friday low

AAPL Clearing 620 is essential to negate the slingshot. 611.56 Friday low has to hold

AGU Range expansion. Want to see 94.60 hold. 97.64 recent swing high

DDD 37.55 now should hold. Must also clear 39.52 to stay swinging

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:

Phase Change: IBM Does have a slight negative slope on the BB, but if holds Friday low and clears 200, could see a run. NSC over 75.00 should push this up provided Friday low holds RRC 62.00 is max risk, 62.65 a bit closer and if can get going, a close over 66.00 very positive PNC Fast track back to unconfirmed bullish phase provided 59.40 holds. Also like to see 60.60 clear


Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing N/A

Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day's lows

CHRW Has to break 53.30 and not clear 54.10

WLT 6 days over pivots and overbought. Has to break 35.48 and not clear 37.22

Bye for now!