Evening Watch List for April 19th

Mish Schneider | April 18, 2013

At least there is always something exciting happening in the market, even on the slow drip, eroding phase days. I am talking about Vertex Pharmaceuticals, which rose 50% in the aftermarket based on a study revealing substantial improvements in lung function in people with Cystic Fibrosis. I mention this because that is the latest strategy for us based on current market condition-looking at individual instruments ready to rocket on their own engine fuel. We did not find that one ahead of time, but we did find First Solar last week! Anyway, with S&P 500 now in an unconfirmed warning phase, following the footsteps of the Russell 2000 and NASDAQ, the only index left fending off the big (thin) blue line (The color we use to depict the 50 DMA) is the Dow. And, with IBM down in the aftermarket, that could also be short-lived. Now that we are pretty clear that the top was put in place after a fun beginning to 2013, we can start to look at selling rallies and finding those pearls in the sand to buy.

S&P 500 (SPY) "Even the strongest fall if the pressure is too great." Yes indeed. Broke the 50 DMA and now in an unconfirmed warning phase. Very possible the 50 DMA will be defended so the week goes out with a level of enthusiasm. But also possible, it will continue its drop to fill a gap to 152.92 left on March 4th.

Russell 2000 (IWM) 88.79 the last swing low from February 26th.

Dow (DIA) The 50 DMA at 143.20 is next place to look at

NASDAQ 100 (QQQ) Poor AAPL! That crushed the NASDAQ to test the 200 DMA. AAPL reports next week. If the bad news is already in the pricing and the earnings come out a bit better than the worse expected or it drops a bit further after the news, it could very well be the time to look at a buy-especially against the 200 weekly moving average 372

ETFs:

GLD Classic white cap trade setting up. New lows, 3 tries to pop, then a failure with a new leg down. That's what I will be watching for. Subscribers: Would mean a break under S1.

XLF (Financials) Tested 17.77 by ticking down to 17.75 and then closing a bit better. But, now in a warning phase which means has to take back the 50 DMA at 18.00

IBB (Biotechnology)Because of VRTX, this ran in the after-market. But, 168 still the place to clear for some confirmation this can hold. Subscribers: R1 lines up with 168

SMH (Semiconductors) Confirmed return to warning phase. Looking to see if can hold 33.50 now. Subscribers: Stayed with the long position-only lightened up a bit on the position size. Has positive pivots

XRT (Retail) On the 50 DMA with today's low.

IYT (Transportation) 104.40 is recent support and if holds 105 level, could still be a buy. Subscribers: A channel that took 6 years to clear, hard to believe in 3 months, will be negated. But have to be patient

IYR (Real Estate) FED says recovery fueled by housing sector. This better hold up over 70.50 or not very roseate. Inside day today-watch this one

USO (US Oil Fund) Glass bottom in play

OIH (Oil Services) Subscribers: A push through 40.40 puts it back over the 200 DMA

XLE (Energy) Bounce off the 200 DMA Subscribers: Bought against the 200 DMA and now want to see it clear 75.18 to keep going

TBT (Ultrashort Lehman 20+ Year Treasuries) Inside day and still holding the slingshot low Subscribers: Broke under my stop but then closed better. 61.00 is a place I am watching before reentering

XOP (Oil and Gas Exploration) Unconfirmed phase change back to accumulation.

XHB (Homebuilders) Closed just under the key support, looking heavy

UUP (Dollar Bull) 22.60 is the weekly moving average

SGG (Sugar ETF) Subscribers: 17.50 is support would like to see hold to keep my eyes on this

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:

C R1 and today's high line up with 44.75 max risk

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:

WYNN Reports May 6th. If you go by my "one day too soon" tendency-I bought this today and got out-but if good, will go tomorrow. Has to clear R1 which lines up with 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: (Opening range reversals are good on anything above S1)

DISH Reports May 6th. Nice ½ ATR today on long entry over 38.00 which now has to hold with 38.45 next point to clear

EL Reports May 2nd. Inside day against the 10 DMA at 66.25. R1 is 67.58 to clear

SPG Reports April 26th. 2 inside days so has to clear today's high and R1, hold today's low

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:

AOL Reports May 6th. Not quite oversold, but had inside day against the upward sloping 50 DMA at 37.17

Phase Change:
INTC
22.45 the 200 DMA as resistance, but with 21.95 now the support
BEAM Reports May 2 Confirmed bullish phase. An opening range reversal the way to go if not already long.
JWN Reports May 16th. Like only on strength over 55.00 against today's low
PXD Confirmed the slingshot now a candidate for an OR reversal to control risk
PETM Reports May 22nd. Against today's low and the 10 DMA is a good risk if this can clear 66.00
HOG Reports 4/25. Over 51.50 could see a pop before earnings with today's low max risk
MUR Reports May 1st. Slingshot low. 60 level good risk point on reversal or breakout
DO, EOG, ESV, RIG and APA had glass bottoms put in

Shorts: See comments on GLD. Only 1 short pick since lots that have setups report very soon

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

LNC Reports May 1. Risk no more than 31.35 the 50 DMA

Bye for Now!