Profit taking certainly dominated the tone of the day. But, one must discern the difference between profit taking and move over. Carefully studying phases, NASDAQ certainly did its part to spook investors on the long side. After the death cross, it closed in a now unconfirmed bear phase. The rest remain bullish, testing fast moving averages and closing on the weaker end of the daily range. Of course, the world waits for Speaker Boehner and President Obama to announce deal or no deal.
S&P 500 (SPY) Held the fast moving average. Stays bullish in phase. Support at 141.85 should today's low break Subs: Pivots Negative with a close under S1 which means R1 becomes important.
Russell 2000 (IWM) Sitting on the fast moving average in a bull phase with eyes on 81.50 the 50 DMA below Subs: 2 days under negative pivots which makes 82.00 important support and R1 important resistance
Dow (DIA) 131 area key support. 132 pivots and back over 132.50 positive Subs: Pivots Negative
NASDAQ 100 (QQQ)Picture perfect combination of a death cross, with prices at the moving average, all of which are converging. Unconfirmed bear phase unless it crosses and closes back above the 200 DMA. Subs: Pivots Negative. 62.60 important as resistance or place to return above
GLD I would consider shorting this either against 165.20 or under 163.70 and in the middle do nothing
XLF (Financials) 15.92 key support. Then, the 50 DMA becomes critical or a move back over 16.20 keeps picture good
SMH (Semiconductors) As long as this stays in an accumulation phase, will look at dips as buy opportunities
XRT (Retail) Confirmed phase change to warning from bullish in a sector that has to look healthy for the overall market. Subs: Bottom of the channel today which is either a good low risk buy or place to short against
IYT (Transportation) Accumulation confirmed provided the 200 DMA holds. Subs: Like to see it hold 91.90 for a reason to buy more
IYR (Real Estate) Has to hold today's low to continue to be a factor
GDX (Market Vectors Gold Miners) Subs: After white cap rally to the 200 DMA, looking vulnerable
USO (US Oil Fund) Under 31.00 and a leg down is very likely
OIH (Oil Services) Today was the short opportunity which now will look for follow through if breaks 38.50
XLE (Energy) Back in an unconfirmed strong warning phase and yet another reason market could be vulnerable.
TBT (Ultrashort Lehman 20+ Year Treasuries) Confirmed recovery phase if today's low holds
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.
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:
SLAB inside day. Max risk 41.90. Like to see it clear 42.95 for new highs
CNI 90.70 is max risk, with move over 91.68 a good sign
TROW Inside day. Outperformed. Max risk 63.62. Like over today's high and R1
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:
MSI Has to hold 54.09 and clear the 10 DMA then today's high
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:
ANF Inside day after a correction from the highs. If holds 46.17, then like over R1 47.24
C Inside day but really have to see it clear 37.82 since slightly negative pivots
UNP Good day compared to market. Inside day. 123.47 max risk. Like to see it take out today's high.
WHR outperformed. 99.90 is max risk with S1 a closer risk. In 2010 high was 118.44 so could have some punch
CRM Took some profit at 165 now holding tail. Inside day and outperformed.
Phase Change: JNJ 2-day correction with 70.31 max risk and move over today's high good FDX Inside day. Converging moving averages and confirmed recovery phase change bullish. Risk today' s low. PNRA After 2 day correction want to see today's high and R1 clear WYN Unconfirmed phase change warning. Has to hold 200 DMA 50.24.
Shorts: Slingshot patterns from highs: TRMB ENR ARG GRA
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
PRGO Big move failure after strong opening. To control risk should not cross pivots
DVN If stays weak, 52.73 R1 should be resistance
BBBY Inside day. Risk today's high
KORS Max risk 50.29 and has to at some point test and break 200 DMA to keep heading south
AVB Unconfirmed phase change back to bear. 133.40 max risk
LEN Inside day phase change to unconfirmed warning. Risk 37.50 level
Bye for Now!