Good news is that despite the down day in the indexes, all held last Friday's lows. As I suspected the tone for the week would be set with today's action, will modify that statement to a degree. Indeed longs should be prepared for more correction considering the indexes although found support, could not move above floor trader midpoints. However, particularly in NASDAQ, a move over Friday's high could also just as easily renew buying. Of course, the more interesting study of the markets right now (well, always), is the divergence in the sectors and groups.
S&P 500 (SPY) 146.61 Friday's high now near-term resistance to plow through, noting market internals remain bullish. January 2 low-144.73 key to hold Subs: Pivots negative
Russell 2000 (IWM) 86.96 the 2012 high is pivotal and for the drama of it all, the closing price Monday is 86.91-so close. 86.04 is the January 2nd low. Over today' high will feel better Subs: Pivots Negative
Dow (DIA) 132.89 January 2nd low. Subs: Pivots Negative
NASDAQ 100 (QQQ) Took out January 2nd low and closed above it once again. Now, has to get above Friday's high to see a resumption of the rally. Like that it held the gap and closed green. Subs: AAPL over today's high could get some relief
GLD Inside day. 158.39 is the 12/20 low. 161.15 the 200 DMA Subs: Slingshot low holding. RGLD also held the 200 DMA. Would follow that lead up or down
XLF (Financials)Inside day which is a fine way for this to rest after trying hard to get to the 2011 high.
IBB (Biotechnology) Impressive move outperforming the market
SMH (Semiconductors) If ready to resume, 32.99 should hold. 33.33 should clear
XRT (Retail) Over 64.18 will clear a multi-month base, but could also easily break further after today's weak performance Subs: The retail picks worked well for a move lower.
IYT (Transportation) Inside day.
IYR (Real Estate) 66.25 resistance. Then a gap to fill to 66.57 from September 19th.
USO (US Oil Fund) 33.95 -34.10 resistance to clear. Subs: If can't clear, could see move down to 33.10
OIH (Oil Services) Inside day
TBT (Ultrashort Lehman 20+ Year Treasuries) Love to see a dip to 65.12 but would not be afraid to buy renewed strength from here
DVY (Select Dividend Index) May see more correction but still like this as a good place for 2013
REE (Rare Element Reserve) Looking to see if this can clear 4.00
XOP (Oil and Gas Exploration) Subs: Inside day
XHB (Homebuilders) Subs: 27.62 resistance therefore, still on short watch and could see correction to 26.00 if market weakens
UUP (Dollar Bull) Subs: 22.10 some resistance but staying long with 21.88 stop
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: After a week of alot of stock picking, will begin to focus on the beta or indexes again.
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:
VMC Like over 54.04 R1 if can hold 52.80
APH 65.63 the 10 DMA max risk. Closer risk 66.70. R1 67.31 to clear
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)
SWK* 74.50 should hold. Today's high also needs to clear
ADBE 38.20 clears 3 year high. Slightly negative pivots so 37.69 S1 has to hold
CNQR Now like to see 70.00 hold. Could see 77.50.
ESV* Inside day. Today's low max risk
FDX Over 94.90 back in business if holds 94.40. Slightly negative pivots
EQT* Today's low now good support. 63.50 next target.
LNKD* 111.45 is max risk. Still like the sideways action
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:
AFL* Hammer candle with a move over today's high and R1 clearing the 50- DMA
Phase Change: DLR* will wait for it to clear 69.22 SLB* beginning to clear the 80 monthly moving average so has to hold now around 72.00 INTC* Right at the 80 monthly moving average with 20.95 max risk. 21.60 has to clear to get this really moving POT* Pushing up against the 200 DMA
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
CNX Unconfirmed phase change to distribution if stays below the 200 DMA 31.86
DDS Slingshot high to start year. 81.28 is resistanceand good risk
TSCO Touched down on the 50 DMA but gave ½ ATR on the short first. Now, 90.80 resistance
BHI Inside day. 43.00 is the 200 DMA it has to stay beneath
TPX Slingshot pattern. 34.65 good resistance for an OR high failure. Has support at 31.80
ESRX 55.00 good risk
COH 56.13 mx risk with underlying support 54.00
SLXP Possible slingshot high but cannot clear 45.00
Bye for Now!