Evening Watch List for October 2nd

Mish Schneider | October 1, 2012

The market began the month and quarter testing the fast moving averages then retreating. Whereas the market internals in the S&P 500 turned positive in the short term, NASDAQ 100 turned slightly negative. The overall trend remains bullish, volume patterns indicate warning and the sectors and groups performed poorly with the exception of biotechnology. Sloppy soup with best advice: Be wary of the market whilst it trades in the middle of the range between the fast and 50 DMAs.

S&P 500 (SPY) Under Monday's low would guess lower in store. Above the fast moving average, assuming it could see 146. Subs: Pivots positive in all indexes except QQQ

Russell 2000 (IWM) 84.50 resistance 81.50 support.

Dow (DIA) The best performer today wound up closing under the fast moving average. Good one to watch to see if it can return over the fast MA and resume move up

NASDAQ 100 (QQQ) Touched the fast moving average and could be first to test the 50 DMA at 67.60 Subs: Pivots Negative

ETFs:

GLD 174 the area to clear as the intraday trading remains choppy and volatile so close to all time highs

XLF (Financials) The 50 DMA looms below, especially after the test and retreat from the fast moving average. However, closed in the green which means middle of the range I refer to. Subs: Pivots Positive

IBB (Biotechnology) 144.60 resistance ahead of the all-time high with a move under today's low reason to believe could see a correction

SMH (Semiconductors) 32.10 and the fast moving average continues to be the elusive area to clear. 31.30 was pivotal last week

XRT (Retail) Also seems to want to visit the 50 DMA unless clears and closes above 63.00

IYT (Transportation) Subs: Still looks heavy but pivots are positive just in case

IYR (Real Estate) Subs: Could not clear the channel with 62.50 next underlying support

XLE (Energy) Acted ok so not a bad one to watch over today's high

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.

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:

TSCO 97.73 is the max risk. Then, has to clear 98.50, the101.28 recent high

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:

HFC Although there is a slingshot high to clear at 42.17, if holds 40.85 worth a shot to see if can clear since weekly and monthly charts look good

FIO Got out even though held the Friday low, and will look again with 29.95 max risk

ONXX Doji day. Today's low good risk. Through 86 could see 95

GNC DOJI with higher close which means some digestion with today's low good risk.

COF 57.40 area max risk after gap higher today. 59.75 last swing high

EOG S1 max risk after gap high and 120 its last swing high

ESRX Improved to condition 1. Must hold today's low. Inside day

LYB Has to hold S1 which corresponds with the 10 DMA. 53.77 recent high to clear

GOOG Provided today's low holds could see new highs

EXP Inside day good volume. 45.81 max risk. 48.10 last swing high to clear

Phase Change: ROST confirmed glass ceiling. Now, overhead resistance at the 50 DMA which means look for a reversal to control risk GD Unconfirmed accumulation phase. Like to see it hold 67.00 max risk APC Unconfirmed recovery phase. Has to hold today's low

Shorts: Didn't not see much I really like since many of the bearish stocks have cleared either the 200 weekly or 80 monthly moving averages

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

MJN 73.90 good risk. 68 next best support

BIDU 114.65 max risk

VMW Unconfirmed bearish phase and prefer an OR high failure against 96.55

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

BBBY after 2 days up, closed near lows and needs to break S1

Bye for Now!