Evening Watch List for October 18th

Mish Schneider | October 17, 2012

Market acted like a good little bull-pausing as it nears resistance yet with no real harm done. Sector rotation continues as well with Semiconductors back under pressure and Homebuilders the big winner. Financial sector doing well and after commenting on the 9 days of a boxed trading range that finally broke on Tuesday, Oil Services rocked. And of course-earnings season-that only adds to the fun.

S&P 500 (SPY) Geoff, president of Marketgauge, substituted for me Tuesday (Thanks Geoff) and wrote initial resistance at 146.34. The high Wednesday-146.32. Next level 147.20 then 148.11 then onward to new highs. 144.75 the fast moving average support. Second accumulation day in volume. Subs: Pivots in all positive.

Russell 2000 (IWM) 83.17 the fast moving average support. 84.54 next line of resistance

Dow (DIA) Low volume day.

NASDAQ 100 (QQQ) Right up to the 50 DMA resistance and still in a weak warning phase. Not expecting too much until the big ones report

ETFs:

GLD Got real close to 170 and until it crosses back above, remains in defensive mode

XLF (Financials) 16.44 the 2012 high.

IBB (Biotechnology) Had the big run this year so really not my first choice anymore as the place to load up long, but good to see it stay firm

SMH (Semiconductors) struggled, but maintained an inside day-one to follow the way the range breaks

XRT (Retail) Would like to see it hold 62.90. Subs: The trendline featured in today's video is one to be respected

IYT (Transportation) In one week I wrote, watch the fast moving average, watch the 50 DMA and now watch the 200 overhead-now that's a move!

IYR (Real Estate) Today's low is important to hold. Subs: Watch the channel featured on the video and then the 50 DMA thereafter.

USO (US Oil Fund) First place to look for any new shorts especially under today's low

OIH (Oil Services) Unconfirmed phase change to bullish

XLE (Energy) It cleared 73.35 Tuesday and followed through perfectly

REE (Rare Earth Element) Subs: Broke Tuesday's low after an inside day by a couple of ticks and closed midrange. As long as this remains in a recovery phase, staying the course

TBT (Ultrashort Lehman 20+ Year Treasuries) Read today someone tried to break into the Federal Reserve. Is he long TLTs I wonder?

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: This is a great market to hunt for new picks since something is always setting up. This is also a great market to stay with the winners-and there have been many. (Today it was CL REGN WHR FLS)

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:

AGU Reports 11/7. Bullish engulfing pattern. Improved to condition 1. 104.25 good risk

GNC Reports 10/25. Improved to condition 1. Like to see this hold above 40.00

LMT Reports 10/24. Improved to condition 1. 93.45 max risk

MPC Reports 11/1. Improved to condition 1. 55.50 should hold

EL Reports 11/1. Inside day. 63.47 max risk. Not overbought so near highs

AGQ 53.34 max risk. Could fill gap to 54.63 next resistance

PXD Reports 10/31. Inside day. Like to see it hold S1 and clear 110.05

LULU Pushing against a trendline. Has to hold 74.40

Phase Change: CF Reports 10/30Unconfirmed bullish. 214.30 max risk ENR Reports 11/9. 73.12 max swing risk. Otherwise, should hold 73.85 the 200 DMA FAST Like this over today's high for move back to accumulation phase. HLF Reports 10/29. Through 53.24 can get to 200 DMA. Otherwise, like to see today's low hold

Shorts:

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

LTD Reports 11/14. Range expansion. Bearish engulfing pattern. 49.05 good tight risk

ADS Reports 10/31. 139.21 good tight risk. 136.52 recent lows

EQIX Reports 10/30. 193.23 max risk

SPG Reports 10/25. 153.51 max risk. 150.30 next support

BWA Reports 10/25. Today's high max risk. Like to see S1 break

INFA Reports 10/25. 27.88 max risk.

PCLN Reports 11/5. Can use 600 for tightest risk.

Bye for Now!