Market recovered more than ½ of Monday's losses and several instruments tested and held the 50 DMA. However, only DIA of the four indexes were able to cross back over their floor trader midpoint which makes today encouraging yet indecisive. Plus volume on the S&P 500 did not confirm the move with an accumulation. Bottom line, watch rates (TLTs closed under the 50 DMA) and small caps (IWM or Russell 2000) for best clues which way as we approach hump day.
S&P 500 (SPY) 151.50 is overhead resistance and still looking at the 50 DMA for support. Subs: Pivots negative with today's high and R1 lining up
Russell 2000 (IWM) 87.75 is the 50 DMA. 90.90 now significant resistance Subs: Pivots negative with today's high and R1 lining up
Dow (DIA) Inside day. 136.00 is the 50 DMA Subs: Let's watch R1 and the overhead 10 DMA
NASDAQ 100 (QQQ) Confirmed weak warning phase since could not cross the 50 DMA. Subs: R1, today's high and the 50 DMA all line up
GLD 154 now key support if this bounce is good to 158 next resistance Subs: Took 1.5 ATRs off in GLD and left a small tail
XLF (Financials) Bounced off of the 50 DMA. Over 17.50 would be an encouraging move
IBB (Biotechnology) Sloppy chart but did bounce off of the 50 DMA twice
SMH (Semiconductors): Inside day. Subs: R1 and today's high line up with a good line in the sand at 34.32
XRT (Retail) Uninteresting DOJI candle for now
IYT (Transportation) Subs: Doesn't look ready yet
IYR (Real Estate) Inside day. Subs: Good housing numbers but still has that nagging slingshot high.
USO (US Oil Fund) Inside day. Subs: Over the 200 DMA, 33.50 is in the same neighborhood as today's high and R1-worth watching
OIH (Oil Services) Subs: Nice bounce off of the 50 DMA with 2 days left to see if it can close over the 80 monthly moving average. R1 and today's high line up
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs did not confirm the recovery phase which makes me real interested to see if the TBTs can clear its 50 DMA. Subs: Confirmed weak warning phase.
DVY (Select Dividend Index) Inside day
XOP (Oil and Gas Exploration) Subs: Not sorry we stopped out Monday, but since this held the 50 DMA, will look for a low risk entry setup if holds
XHB (Homebuilders) Inside day Subs: Inside day means that if it cannot get through today's high, still a possible short candidate
UUP (Dollar Bull) Subs: 22.65 is the 200 weekly moving average
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) 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:
BSX 7.16 now a good risk and over the 10 DMA 7.41 and Monday's high 7.47 will look to add
OPEN* Still has a shot to clear recent slingshot highs 56.41. The 10 DMA at 54.94 is pivotal
ISRG 569.50 clears the 10 DMA and pivots and has to hold 567
OSK Holding gap from mid-January with today's low good risk and a move over 39.15 R1
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)
MAS Inside day. Max risk 18.00 Like over today's high
GMCR 45.00 is the 10 DMA and pivotal
LPX Inside day and has to hold today's low which is the 50 DMA. And clear today's high
CME Inside day. 59.26 clears recent highs with next resistance if clears 60.00 the 2012 high 60.92 but nice move over the 200 Weekly reversing a multiyear trend
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:
CI Not as oversold but did hold the 5 DMA with today's high and R1 lining up.
Phase Change: F Held 12.00 and with an inside day in a weak warning phase. 12.42 is R1 NTES Have to wait for it to cross R1. Max risk now 50.72 RAX Slingshot low in place. I really like the 2 shooting stars and over 55.34 R1 will buy with risk to 54.35 TWC Tried to confirm a slingshot low and will if can get back above 86.80 with risk under today's low BZH Back in an unconfirmed warning phase with an inside day and today's high and R1 lining up CAT Long from 89.13 but will add if clears R1 and risking the 200 DMA BA Has to hold 75.00 and clear 76.00
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
IACI* Already short with max risk 41.32
NVDA Failed the converging moving averages with 12.47 now max risk and 11.90 next support
BIDU Positive pivots and sideways consolidation which means has to break today's low
ALXN R1 risk is 86.35 and overhead is the 10 DMA at 87.01. If can break 84.50 could see recent lows
Bye for Now!