Evening Watch List for January 3rd

Mish Schneider | January 2, 2013

Happy New Year! Some confirmed phase changes to mention: S&P 500 back to a bullish phase. NASDAQ back to an accumulation phase-clearing the last swing high. The Dow back to bullish and Russell 2000 has been bullish but now has 2012 high 86.96 to contend with. An excellent start to the New Year with good volume. Now, the most fun part will be watching sector and group rotations-will the trends from 2012 continue or will there be new leaders?

S&P 500 (SPY) 146.50 is next area of resistance while 145.15 level good support to hold Subs: Watch for range break tomorrow as per calendar range after first full day of the year. No more slingshots from 12/19 to worry about

Russell 2000 (IWM) 86.96 the 2012 high-either it clears and runs for another leg up-but since have to be prepared for anything, fails the high and breaks 86.00 for a correction

Dow (DIA) 133.70 level was recent high which cleared on the close. 137 if this holds, looks like a reasonable target

NASDAQ 100 (QQQ) 66.75 a good area to hold. 67.27 some minor resistance but after that, looking possible for a move to 71.00.

ETFs:

GLD Underperformed after opening into resistance. 162.75 December 31st high. Subs: If fills gap to that high and continues weak, will look to short

XLF (Financials)17.12-17.20 is the 2011 high with 16.70 now support to hold

IBB (Biotechnology) Subs: 141.87 is the slingshot high from 12/12. Could mean it's at the top of its range or that it will try for 146 area again from here

SMH (Semiconductors) Like with most of the gaps higher today, the gap low should hold to keep the move going until sectors get way oversold. A correction would be great, but may not happen just yet. Subs: No more slingshot high to contend with.

XRT (Retail) Underperformed the market. Could reflect some consumer hesitancy ahead of the second round of negotiations on debt ceiling. Subs: 62.35 is S1. Over 63.50 will give it new life

IYT (Transportation) 101 is the target. 96.00 should hold.

IYR (Real Estate) 66.25 resistance. Like to see today's low hold or could be some signs of trouble

USO (US Oil Fund) Would not be looking for a long now. With the gap up, might consider a short under today's low

OIH (Oil Services) Subs: 39.93 is the slingshot high that either has to clear, or a place to look for shorts

XLE (Energy) Subs: 73.39 is the slingshot high that either has to clear, or a place to look for shorts

TBT (Ultrashort Lehman 20+ Year Treasuries) Called for a bottom last month-now pushing against the 200 DMA

XOP (Oil and Gas Exploration) Subs: 54.60 should hold now

UUP (Dollar Bull) Subs: Sitting long with stop under 21.60

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.
NOTE: Will eliminate anything with an RSI over 92.00. An asterisk * means it's a 2013 pick.

Category 1:
(Aloha) N/A

Category 2: (Pipeline) N/A

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)

VMC Gapped higher and improved phase change. Today's low is max risk. 59.15 is the overhead 80 monthly moving average

TROW Over 67.00 if holds today's low, could see move to 70.29 and beyond the 2011 high

VAR* 72.61 to clear in order to see new highs. 71.50 close risk but 71.00 is the major support

DO* 70.15 is the overhead 80 monthly moving average to clear but for now, looks good with 69.00 good area to hold

JNJ* Like to see 70.00 hold. 72.00 good target for now

CNQR Over 70.00 if holds today's low, could see leg up to 2012 high76.15

CELG 82.78 2012 high with today's low max risk.

AFL* Has to hold today's low and clear 54.93

AMZN Tested and held the 10 DMA, now max risk. Some resistance at 260, but good place to look if market holds up

Category 4: (Rip Tide) N/A

Phase Change: SLB* phase change if holds 70.45. Like to see it eventually get through the 80 monthly at 72.07 SLG Phase change. If 200 DMA holds, over the 80 monthly and good start to year INTC Right at the 80 monthly moving average with 21.00 max risk. FCX (no phase change but if today's low holds, island bottom.

Shorts: Slingshot highs to watch: CLF SOHU (still under 80 monthly moving average)

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

BIG 28.50 now good resistance. Under the 80 monthly with next support 27.00

BBBY 56.25 tight risk with move under today's low, S1 reason to believe going lower

GNC* Short at 33.40, took ½ ATR. Now, could see 26.00 as target

IACI failed the 200 DMA-still has to break S1 since pivots positive and not get over 47.45

Bye for Now!