Evening Watch List for July 18th, 2011

Mish Schneider | July 17, 2011

SPY Still the major concern. The 50 DMA at 131.50 held, but is still declining in slope. The floor trader pivots are neutral to slightly negative at 131.45. That is a big pivotal area now for Monday. If that area fails, considering Friday was an inside day, with no discernable volume pattern, under 130.68 see a test of 128.75 level next. But, 132, would be a healthy sign.  On the weekly chart, the bullish trend remains intact.

QQQ Also an inside day on light volume. 10 day moving average is the overhead resistance at 58.10. A close above that would be encouraging. Otherwise, with positive pivots would like to see it hold 57.66. On Friday, 57.40 area was intraday support. If that breaks down, with a declining slope of the 50 DMA beneath, we could easily see another test there at 56.80. Earnings in leading stocks will have a big impact as we begin this week.

IWM another inside day and relatively narrow range after an atypical wide range last Thursday. The 50 day moving average is still in a declining slope coming in at 81.90. With negative pivots, the indication points towards more downside, especially if the 50 DMA breaks. However, above 83 should test the 10 day moving average overhead at 83.81. Ideally, would like to see some digestion and sideways action between the two moving averages over the next couple of days.

This is a real stock pickers market. Very mixed signals with a bearish to neutral McClellan Oscillator, meaning the market can go either way. In the near term, while the market tries to find next direction, buying weakness and selling strength has worked for daytrading. Unless you are managing deep in the money swing positions by trailing up/down stops and locking in profits, until we clear earnings on the leading stocks and come to resolution concerning the US debt ceiling, would be reluctant to over commit on any new long or short swing positions. Longer-term trend on the weekly charts still bullish. 

Featured ETFS: 

SLV inside day on Friday. We locked in half of our long position, keeping the balance considering the weekly close was above 37.90, the high over the last two months. Above 38.37 expect a move to 40 and possibly 44.50. Near term support at 37.75 and then 37.25. Now a reasonable risk point for swing trades.

EWC**Four weeks ago, this broke and closed below the 50 weekly moving average. The following week, it tested those lows then rallied and closed back above the 50 weekly moving average keeping the long term bullish trend intact. On the daily chart, Friday had an inside day after a return move above the declining 50 day moving average now at 31.60. The 200 day moving average is at 31.40 the ultimate support. The FTP is positive. Above 32.10, especially on a closing basis, breaks a trendline on the daily chart. Could possibly be forming a head and shoulders bottom with the neckline above 32.90.

IYR Held the 50 DMA and closed above R1. 61.71 is the 10 DMA, if cannot cross and close above, will exit below S1 60.73 on balance of long position.

XRT**a positive slope on the underlying 50 day moving average now at 52.73. If it holds 53.65, and gets back above Friday's hi 54.41, has some resistance at the 10 day moving average at 54.80, but above that expect a move to 56.

SMH after coming very close to testing lows from June at 32.15, recovered on the close. Also significant is the test and hold of the 50 weekly moving average at 32.23. If these critical support areas continue to hold and it gets back above 32.80, especially on a closing basis, although it still has a lot of overhead resistance, the bullish weekly longer term trend stays intact. Otherwise, this will not bode well for the rest of the market and a test of the 30 area very likely.

OIH Rallied above the 10 DMA at 152.29. Next resistance 154. Recent high 156.28. Now, must holdthe 10 DMA or could retrace back to 150.40, the 70 EMA.

UUP Still long the dollar. With upward sloping 50 DMA and positive pivots, provided 21.34 holds, still see room for the dollar to rally.

Picks: The long picks have positive/neutral slopes on the 50 DMA, positive floor trader pivots, good daily chart setups and enough time before earnings for possible miniswing to swing trades. The risk is clearly defined. The short picks have negative slopes on the 50 DMA and negative stacks for the floor trader pivots-also with clear risks. Note early week earnings schedule below.
Earnings:

Monday IBM ZION DAL WYNN HAL

Tuesday AAPL CMG CSX HOG JNJ MMR BTU RVBD VMW WFC

Wednesday MO AMR AXP CAKE EMC EBAY JCI UTX USB INTC

Longs: Long GLD SLV POT AAPL SWN QQQ IYR UUP. Have taken profits in all already and adjusted position size for weekend exposure. Note-we never risk more than 3-5% of our entire equity at one time.

LO*Reports July 25th. 109.89 is the FTP which is neutral. Has tremendous underlying support at 107.75. If this clears 110.51 on a closing basis, breaks a flag on both the daily and weekly with a projected move up to 124. Day to mini.

CLF reports July 27. Two Inside days in a row. 95.70 the support area to hold. Above 98.30, clears a trendline on the daily and could see a move up to 102. Daytraders can use are risk to 97.40. Day to mini

ANF* reports August 15. Inside day and neutral pivot at 73.50. 72.36 the 10 day moving average and near-term support. At 71.10 the positive sloping 50 day moving average is underlying support. Would consider buying on weakness against the 50 day. If the market is firm, once this clears 75 could see a move up to 81. Day to swing

CVX*reports July 29. Inside day, the FTP at 105.88 with the 10 day moving average at 105.15. Underlying support at  103.75 should this come in weaker. Above 106.50, has overhead resistance at 110. Day to mini

ALKS*near-term support at 18.85, inside day, 19.12, the 10 day moving average and 19.23 the FTP. Above 19.40, has near-term resistance at 20, with a projected move up to 21 and possibly beyond. Day to swing

ACOM* reports July 28. Two inside days in a row. Underlying support at the 10 day moving average 42.39. The FTP is at 43.83. Overhead resistance at the all time high 45.79. Depending on how it opens with either look to buy on weakness or strength, depending on how the overall market acts. If it gets through the highs projected move to 55. Day to mini

MGM*reports August 8. The 10 day moving average is at 14.41. The FTP at 14.85. Above 15.25, next overhead resistance at 15.80. On the weekly chart, a close above 16 and could see a move up to the 200 weekly moving average 24. Day to swing

Hon. mention FCX. Reports July 21. Must hold 54. Inside day. Above Friday's hi 55.40, has overhead resistance at 56.12, could see a move to 58.25 or higher before earnings. On the weekly chart, a close above 60 is potentially explosive. Day to mini but would watch after it reports.

Shorts: 

MET reports July 28. Negative pivots with FTP at 41.65. Above Friday's hi 42.12 would not want to be short since it could easily rallied back up 200 day moving average at 43.40. However, under Friday's low 41.25 especially if the market is weak, next support at 40.37 and then at 39.15. Day to mini

SLXP*reports August 8. Good resistance at 38.45 where the 50 day moving average is. The FTP is at 37.88. Would not want to be short above 39.66 the 50 weekly moving average. But, if the market is weak and it cannot get above Friday's hi 38.20 and breaks the FTP, with an inside day, under 37.40, next support down at 35. Day to swing.

CMI*reports July 26. The 50 DMA is about to cross  below the 200 DMA at 103.46 which will put this in a death cross. Recent low 103. Would not want to be short above 105.76. But, the FTP is at 104.57 and if it can not get through Friday's hi, and the market is weak and it breaks the FTP, could see a move down 100 to before earnings. Day to mini

WLT*resting on the 50 weekly moving average at 110 with Friday's low 109.11. The FTP is at 110.78. If cannot get above 112.40 area and breaks the FTP, would take a small short position and add if closes under 110. But, as long as it continues to close above 110, the longer term bullish trend is intact in spite of the negative shorter term setup. Next underlying support at 104.30. Major support down at the 200 weekly moving average at 66. Day to Swing

PAY*reports August 29. Still above its 50 weekly moving average at 40. On the daily, it is below the 200 DMA now at 42.88. If it cannot clear the 200 DMA and breaks beneath the FTP at 42.51, last week's low is 41.98. Below that expect a test of the 50 weekly M.A. Underlying support at 38 and then 35. Would not be short above the 200 DMA. Unless it breaks the 50 weekly movinvg average, long term trend still up. Day to swing

Have a great Sunday!