Evening Watch List for July 23rd

Mish Schneider | July 22, 2012

And if that ain't the way of the market this year-get in, hit the 3-5 day move up or down, and get the hell out. Give back some of your hard earned dollars before heading back to a mainly cash position. If one can do that and stay one step ahead-that's as good as it gets. So, what now? Distribution day in volume after 2 accumulation days in S&P 500 and one has to say, correction in a weak bullish phase. Lots of earnings this week, so remaining relatively uncommitted for now as most conservative approach.

S&P 500 (SPY) 135.60 is the next area of support or where the fast moving average is. Since it gapped lower Friday, also watch for a move above 1137.21 for a resumption of the up move. Subs: Coming into Friday we were focused on S1 after this had positive pivots all week. Note that S1 broke, there was an Opening Range High Reversal and a move lower. Always great to study these short term indicators.

Russell 2000 (IWM) Considering this was the one to keep the bullish phase intact 2 weeks ago, it is also the first one last week to break the fast moving average. 77.59 last swing low corresponding with the 50 DMA. Let's see what happens there. A move back above 79.80 and a more roseate picture.

Dow (DIA) Subs: Even with the OR high failure under S1, Friday was tough since never got our ½ ATR or first target

NASDAQ 100 (QQQ) Never thought of 65.25 the high from 7/05 and last Thursday as a double top but it's possible. Now, that is the area to clear, otherwise, looking at 63.65 then 63.00 as next support.

ETFs:

GLD Reversed the trend of underperforming the SPY on Friday by significantly outperforming. That is how non directional things are now. 154.05 the 50 DMA as resistance. 2 closes above and phase goes more positive, otherwise, still in bear phase. Subs: Pivots negative

XLF (Financials) 14.25 support and through 14.80 back in business.

IBB (Biotechnology) If July closes out under 130, would see that as a key reversal to its beautiful uptrend

SMH (Semiconductors) Looking at 30.50 as this could not confirm a phase change to recovery and stays stealthily in a bear phase.

XRT (Retail) Couldn't hold 59.50 support, now pivotal and overall sloppy chart

IYT (Transportation) Thursday's hammer candle was a kiss of death as now the 200 DMA is staring this group down like the devil might have come out to play. Only a move back through 91.15 will improve this ominous looking chart

IYR (Real Estate) Over 65.00 I like it again, but unless that happens, has some ways to drop before it tests the 50 DMA

USO (US Oil Fund) 34.00 is a substantial swing area

OIH (Oil Services) Subs: a slingshot is only one if confirms. Overbought but needs to break S1 to see a correction which corresponds with Friday's low

TBT (Ultrashort Lehman 20+ Year Treasuries) Subs: Out of long for now JNK- no loss stop remains.

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: For DTHS-Since anything reporting before next Thursday is for daytrades only, note the separate list.

Daytrades:

Long: COG Through R1 40.73 provided 39.50 holds Positive Pivots
EQIX Has to hold 165.50. Positive pivots
Short: CLF 46.81 resistance and 44.42 recent swing low
AAPL 607 Resistance. Under 603.15 breaks last week's low

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: (Note-some picks not classic condition 1 but in good accumulation phases)

EWW 3 days corrected after matching 2012 high. Max risk 62.17 and should clear 62.52

COST 2 days under pivots. Max risk 94.98. 95.70 the FTP and over last week's high looks like another leg up for miniswing.

MOS Accumulation Phase. 2 days under pivots, holding the 80 monthly and 200 weekly moving averages. If holds above 56.60 keeps gap intact. Then must clear R1 57.83

POT Reports 7/26 Held up well with 2 days under the FTP. Must hold 44.70 then the pivots 45.25 then R1 45.79

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:

DG DOJI day making 52.50 pivotal. Max risk 52.26 the FTP and over R1 53.11 could see pop

LEN 30.75 is pivotal-the 10 DMA. Friday low max risk

TOL 29.770 is max risk now as it closed on new highs

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:

PCYC Max risk 48.50. Inside day Friday so should clear Friday high which corresponds with R1.

PM DOJI day 88.80 pivotal with max risk Friday low. R1 and Friday high line up

Phase Change: KSU confirmed phase change with an inside day. Negative pivots so has to clear R1 71.45 to resume and hold 70.30 S1.TSLA Reports 08/01. Has to hold the 200 DMA at 31.27, clear the pivots at 31.77 then R1 and Friday high.

Shorts: Nothing oversold

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

CAVM Should not clear 25.00. Under 24.00 breaks the 10 DMA. Reports 8/01

CHKP 2 inside days. (This also means can buy if range breaks up) 49.86 max risk and needs to break S1 49.15

CREE Should not clear 24.14 and needs to beak 23.60

EL 54.06 R1 which should not clear

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

HOT Reports 7/26. Has to break S1 51.43 after 6 days above pivots and now a death cross

Bye for now!