Evening Watch List for July 20th

Mish Schneider | July 19, 2012

First big stock earnings yields post market gain in Google. At time of writing, it's up over 4%. This on the heels of a digestion day in the S&P 500 with a higher close for the 3rd consecutive day. Plus, now a second accumulation day in volume. Always a good sign. Russell 2000 lagged, closing in the red. NASDAQ was the star of the show while the DJ Industrial Average although firm, went more sideways. This adds up to an end of the week anything can happen and more likely than not, not much will happen scenario. Some big earnings next week. Therefore, keeping with the phase, the market is bullish, the divergence as the financial sector sold off keeps it interesting, and each day, finding the shining sector makes for some great daytrading. Swing traders should be holding from when the bull phase reappeared on July 13th.

S&P 500 (SPY) After so many days holding the pivots, more focused now on S1 which comes in at 137.22. Then 135.50 key support. Overhead, the video points out a gap to be filled from May 3rd.

Russell 2000 (IWM) Dropped below 80.00 which means now we look at 79.55 next closest support. S1 is at 79.60. If can climb back above 80.00 then we are back to looking at 80.96 next resistance.

Dow (DIA) S1 and today's low line up

NASDAQ 100 (QQQ) Gapped higher and closed well although not above 67.25 which is the high from July 5th. A long as today's low holds, market should stay firm, but like the above indexes, watching S1 and if that fails, 64.50 then 63.65 is next support.


GLD Slightly underperformed the SPY. Now, stuck between the fast and 50 DMA moving averages.

XLF (Financials) Still consolidating and holding the fast moving average. And that is after Morgan Stanley missed earnings. Perhaps if not long, best to wait for this area to clear or over 14.80.

IBB (Biotechnology) Since September 2011, this has made a new high every month. That might be the best indication to watch-the month that pattern reverses.

SMH (Semiconductors) Subs: Took 1.5 ATRs and now if left tail, 30.50 key support.

XRT (Retail) As long as 59.50 holds, starting to look like a re entry long is better now.

IYT (Transportation) Like the hammer candle and the move above 92.45. If S1 holds, then bias remains positive

IYR (Real Estate) Back over 65.00 and could be end of this two-day correction provided, today's low holds.

USO (US Oil Fund) 99% on the daily 2-day RSI as it approaches nest resistance 35.70

OIH (Oil Services) Possible slingshot pattern with new 60-day high and close on the lows. Watch S1, 37.57 and then could see a dip.

XLE (Energy) 69.06 the 200 DMA and significant resistance. Subs: Under today's low will probably go short for a day to miniswing trade.

TBT (Ultrashort Lehman 20+ Year Treasuries) Subs: Love to see 15.00 clear in TBT. JNK-Took off some at first profit target and now no loss 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: As we end the week, looking mainly at the week's picks that still have room with good risk. Since the DTHS folks are here for a week, I have some notes on daytrades only.

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: N/A

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: 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:

BEAM Narrow range day. Like to see 62.70 hold. 64.00 recent high 65.48 2011 high.

BUD Really narrow range day at an inflection point. Should hold today's low. All time high 79.65

DTV 48.35 max risk. Good volume today. 50.35 is the 2012 high. Then 53.40 20111 high. Reports 8/02

EW Reports 7/24 so a day to maybe miniswing trade only. 102.14 max risk. Like a reversal or breakout.

FDX Can use a tight risk now to 92.50 and although it traded above 92.80 intraday, it needs to stay above there now.

PX Reports 7/25. Nice consolidation with an opening range reversal. Now, over 109.20 risk is 108.65 to see if can move higher before earnings

ULTA Back to condition 3. Today's low max risk. But over the 10 DMA-a condition 3 since slope on 10 DMA is negative.

Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 1-4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:

HSY 71.28 now tested twice and max risk. Over today's high takes out R1. Not oversold but a condition 4. Reports 7/26.

Phase Change: IBM Watch for an OR reversal if the 200 DMA holds. PRU Almost anotherinside day and positive pivots. Should hold 48.00 BEN 2 inside days in a row.Reports 7/31.Today's low good risk. Over 114 should be good. Positive Pivots. TSLA inside day. 3 days under pivots so needs to hold today's low and clear 32.90. TSCO slingshot bottom more probable.Now, 80.22 max risk with the 200 DMA at 82.50 resistance.


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

WLP Reports 7/25. Range expansion day with max risk 63.81 and a break of today's low could see 56.61 next best support

SWN 2 inside days. Cannot clear 31.89. Reports 7/26.

Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day's lows

CREE Could not clear R1 now max risk24.85 and should break today's low which lines up with S1

TCK Cannot clear 31.34 and should break today's low

Bye for now!