Evening Watch List for February 13th

Mish Schneider | February 12, 2013

Creeping back into overbought conditions, the S&P 500 continues its sort of bizarre looking sideways with moments of upside, overall incline. NASDAQ is holding the top of its one month consolidation, although without much cooperation from AAPL, turning out to be the dud of the first quarter 2013. The small caps have been the clearest so far and remain so although they too are inching into overbought territory. All in all, the more traders try to pick the top, the less chance it will happen anytime soon. Besides, past issues of this daily have spelled out how to detect a market top. A market overbought can always get more overbought.

S&P 500 (SPY) Dips remain buy opportunities until something extraordinary happens Subs: Positive Pivots

Russell 2000 (IWM) Subs: Pivots Positive

Dow (DIA) Looks like it has a lot more potential

NASDAQ 100 (QQQ) The anomaly of the 2013 rally. Bullish phase. Lots of room. 67.63 was gap low from 02/08 to hold. Subs: Pivots Negative

GLD Held the December low on this dump with a decent comeback. Subs: Always watching for island bottoms and its possible although no signs of one yet

XLF (Financials) Leader and looking like even with its starts and stops, on the way to 19.95 area

IBB (Biotechnology) Now, even more convinced this could still run up, but this sector had its year last year.

SMH (Semiconductors): How do I love thee? Subs: Watch that 10 year consolidation as we are approaching the highs

XRT (Retail) Kind of funky candle here. Subs: Under today's low and S1 line up.

IYT (Transportation) Inside day and not done yet to the upside Subs: Through a 6 year channel so no reason not to believe we can see much more upside this year

IYR (Real Estate) Impressive run to new multi-year highs. Subs: An OR reversal would be a good low risk buy

USO (US Oil Fund) Subs: Improved in condition. 35.08 the 10 DMA for it to defend. Looks good again

OIH (Oil Services) Subs: Over 43.78 takes out the 80 monthly moving average and a lot of recent resistance

XLE (Energy) Subs: Would follow this long over 78.60. Now, the 10 DMA has to hold at 77.94

TBT (Ultrashort Lehman 20+ Year Treasuries) The last 7 trading days have all been within the range of the big trading range made on February 1st. Subs: Today's low a good risk as this could be setting up for a new long

DVY (Select Dividend Index) Slow but steady winning this race

XOP (Oil and Gas Exploration) Subs: If today's low holds, great correction with good risk to reenter long. Will watch carefully

XHB (Homebuilders)

UUP (Dollar Bull) Tested the 50 DMA. Interesting to see if it can hold now at today's low for a possible bottom

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:

NFLX: 174.80 is 10 DMA and daily low. Should be over 179.10

RL: Inside day. 177.25 is FTP. Should hold 176.20

CYH: Inside day sitting on good support.

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:

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: (Opening range reversals are good on anything above S1)

NSM: Breakout over 38.80 or OR reversal against 37.60 would be ideal. S1 area of 37.40 lines up with good support

SWK: Prefer a reversal. Good areas would be 77.20, 76.75, or 76.35.

WHR: This stock never seems to never go straight up so I'd look for reversals. Key areas for a reversal would be 110.30, 109.40, and 108.20

ESV: Look for support 63.60 (FTP and intra-day swing low) and 63.27 (S1 and Monday's high). Look for resistance at 64.25 and 64.50

MOS: 61.80-.85 lines up with daily highs and R1. 61.40-.35 is the FTP and in Monday high. S1 at 61.05 also lines up with intra-day support.

USG: Prefer a reversal. Look for support at 29.40 and 29.05. Should hold S1 at 28.78

CMI: 3 Inside days - 120.00 is the big breakout.

IR: Prior low at 52.77 should hold.

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:

EQT: Pulled back into support are Must be over 61.00

HCA: Broke big daily support but recovered on huge volume. Prefer it to be over PDH at 36.53.

AEM: slingshot bottom pattern but light volume

Phase Change:

CTXS: Back over the 200 DMA, and broke out of an inside day at the end of a nice flag. FTP near 73.20 should be good support, and S1 at 72.60 lines up with the 200 DMA. Break outs work too

WLP: Golden Cross (50 DMA crossing the 200 DMA). Plus, inside day in tight consolidation.

NTES: Two very tight days on the 200 DMA could go either up or down.

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

TXT: Slingshot pattern should trade under PDL to confirm, but does have good resistance at 29.30-.40 for OR reversal potential

CRUS: inside day within a tight flag to 10 DMA. Should be below FTP at 27.85

PETM: Flag up to 200 DMA and the 20 DMA. Consider breakdowns or reversals up to R1 at 67.10

ESRX: Prefer a reversal up to 54.88. Should not break 55.00

JCP: Inside day after 5 very tight days on the 50 DMA. This could go either direction. Use yesterdays range as key points.

AAPL: Look for breakdown or reversals. Look for resistance from 472.65 -473.25

Bye for Now!