With the end of the week here, a lot of traders do not know which way is up or down. Our trading plan worked beautifully. Long Monday, add Tuesday, take profits Wednesday, more on Thursday, stops on balances-and short a couple of the weaker stocks like BHI and CREE. But, it's like riding a surfboard. Market requires razor-sharp focus, excellent stock picking abilities and most importantly, a solid and repeatable trading plan that works with the phase of the market.
Subs: Pivots still positive on all indexes
S&P 500 (SPY) 131.00 area next support unless this returns and holds over 132.50 on the open
Russell 2000 (IWM) Stopped at 5/29 high and landed on the 200 DMA. Some midrange consolidation would be healthy.
Dow (DIA) Held up the best which means if 124 holds again, good place to go for more upside.
NASDAQ 100 (QQQ) Reached the 5/29 high and retreated to no particular chart point. Tells me either more downside to the fast moving average 61.85 or a move back above 62.50 and through today's highs
GLD Giving this a chance to find support here around 154.25 before jumping back in
XLF (Financials) Needs a weekly close above 14.30. And, needs to hold 13.80
IBB (Biotechnology) I know this is premature, but looking at the best performing sector for the first ½ of 2012, today's activity suggests it could be forming a top. Subs: Watch ALXN REGN for failures of S1.
SMH (Semiconductors) Had the chance to cross the 200 DMA and could not.
XRT (Retail) Under 57.00 not a great end to the week in the other strong performer of the first ½ of 2012
IYR (Real Estate) 60.00 has to hold
USO (US Oil Fund) Looked at the fast moving average and then turned on a dime
OIH (Oil Services) Subs: Watch S1 on this since could be another short below
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: Today's video covers Trading Plan Part 3. For new picks-with tomorrow Friday, limiting the long picks. Have to watch the indexes
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:
EW S1 at 86.76 max risk
PPG Watch S1 at 101.84 to hold. Has room to last swing high and beyond if market holds
YOKU 23.20 should hold for this to have a chance at 25. if that clears, could see good leg up.
AMZN 217.47 S1 has to hold
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: N/A
Category 5: Titanic-Bear Phase, Negative pivots, not oversold, Risk R1 or previous day high. Target: Day to swing
BHI Cannot clear 41.01. Potential head and shoulders featured on today's video
VMW Cannot cross 94.13
HUM Cannot cross 78.42
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
CLF Cannot clear 49.43 and should break today's low
JOY Cannot clear today's high and should fail today's low
OAS Cannot cross 26.33
SLB Cannot cross 65.92
Other: REGN has negative pivots and under S1. 127.55 is the 50 DMA to watch for a break