Evening Watch List for March 27th

Mish Schneider | March 26, 2014

Back on March 4th, the small caps Russell 2000s had a huge surge in volume-triple the daily average. I welcome you to go back and review the ensuing daily emails as I began to write about the volume indicator and how that activity could be the start of a blow off top.

I also wrote a lot about the volatility-that as the market traded near the highs, the volatility was widening.

Then, I went on vacation coming back to a “not much has changed” scenario. Tuesday’s session was noteworthy as 2 out of the 4 indices had inside days. Furthermore, NASDAQ began its dance with the 50 DMA.

Now, 2 of the indices closed with unconfirmed phase changes to warning-IWM and QQQ-no surprise.

The interest rates have been equally “telling”, continuing to decline in the face of Fed “taper”.

Bottom line-market top seems to have confirmed for now. How ugly will it get? Looking at SPY, the 65 week moving average has not been tested since 2012. That price today stands at 168.50. Ugly.

S&P 500 (SPY) Bearish engulfing pattern. The 50 DMA is 183.50-could be near-term support Subscribers: Negative Pivots in all

Russell 2000 (IWM) Sliced right through the 50 DMA at115.50. Maybe it could get back through but it seems rallies should be met with selling

Dow (DIA) The declining 50 DMA underneath serves no comfort if this continues south

Nasdaq (QQQ) Dare I see 78 is the 65 week moving average?

XLF (Financials) If I were to look anywhere for signs that today was a one day selloff its here if clears back over 22.40.

SMH (Semiconductors) Under today’s low, even this group will have to head south

IYT (Transportation) Never took out 136 and instead, was one of the first to give it up

IBB (Biotechnology) So Tuesdays rally was the one to sell into after all

XRT (Retail) 2 strong distribution days and close to major moving average support

IYR (Real Estate) 67.00 is the weekly moving average and ultimately the place to defend or not by the end of this week

GLD Right on the golden cross so has to cross back over 127.15 to look good

USO (US Oil Fund) Phase change to accumulation-unconfirmed-seems to be saying something is up-just don’t know exactly what yet

OIH (Oil Services) After new 2014 highs, now perhaps a topping candle

XLE (Energy) Another fave if market can hold

XOP (Oil and Gas Exploration) Have to look at strength here rather than buying a dip

TBT (Ultrashort Lehman 20+ Year Treasuries) 2013 low was 58.23- super long way away

UUP (Dollar Bull) 2 inside days

EEM (Emerging Markets) Subscribers: Rejected the 200 DMA today.

EWG (Germany) Managed to get to an unconfirmed bullish phase

FXI (China Large Cap Fund) Subscribers: Unconfirmed phase change to recovery but can it stick?

CORN (Corn) Subscribers: Major compression

BAL (Cotton) Subscribers: 60.53 high in 2013-got 9 cents from it then collpased

SGG (Sugar) Subscribers: Great test of the 200 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

Category 1: (Aloha)N/A

Category 2: (Pipeline) N/A

Category 3: (Double Up) N/A

Category 4: (Rip Tide) N/A

Phase Change:
HCA
Ran up today and now like an ORR against the 50 DMA 49.66 best
THC
left a slingshot low. 40.17 the 10 DMA for an ORR entry
DRI
Still have eyes here as long as 49.70 area holds. Like to see it clear 51.02 or R1
JCP Like to see this hold 8.49 area and clear recent highs-9.28
SODA 41.36 is the 10 DMA with a move over 43.20 better
PM Like to see this hold 80.20 and clear 81.00

Shorts:

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

TWC Short 2/3 swing position against the 50 DMA

CTRX 45.45 now resistance to sell against

NFLX like more for a day to miniswing after an inside day

Bye For Now!