If there was ever a week I was happy to see end, it was last week. Not because we lost money-or had it wrong-en contraire. We were well ahead of the curve-don’t chase rallies or dumps-stay patient and wait for a significant reversal of current trend.
S&P 500 held the 50 DMA and the bull phase as did the Dow. Sure, the selloff happened in one day after climbing for 6 days, going sideways for 2 days. Sure, the small caps and NASDAQ look a lot worse (IWM) super close now to the 200 DMA.
NASDAQ held a fast moving average and 86.00-a target after failing to approach the 50 DMA.
What does this all mean? Clearly, you have read that certain instruments are safe-utilities, household goods, etc. Perhaps. But if the market goes through a major liquidation, very little remains safe.
For our part, we will look for SPY and DIA to fail the 50 DMA or not. We will look to short there as opposed to the big momentum stocks that have been hit hard already. And, we will continue to trade the soft commodities, which have presented profitable opportunities all year.
One more note-interest rates-possible Friday was a peak low for rates-possible. We will be watching.
S&P 500 (SPY) 185.77 up 185.92 is the final frontier of support Subscribers: Negative Pivots in all
Russell 2000 (IWM) 110.38 is the 200 DMA with a move over 112.50 possible that was it for now. Sometimes it’s more of a wide range that establishes as opposed to a major move one way or another. This one is either or-a huge topping pattern that measures down to 100 or a drop to support that bounces around going nowhere in particular.
Dow (DIA) 50 DMA 162.80
Nasdaq (QQQ) Held 86 for now, If gaps below not good, if holds then back to the trading range theory
XLF (Financials) Didn’t hold the 50 DMA but did hold the fast moving average. Range to watch for a break under 21.75 or over 21.95
SMH (Semiconductors) Warning phase first time since February
IYT (Transportation) Looks like a top for now-with the 50 DMA below
IBB (Biotechnology) Subscribers: This had a slingshot low just like IWM and is now near the 200 DMA, just like IWM. Question will be-does the slingshot low hold up or if violated, how much more damage in store?
XRT (Retail) So much for the 200 DMA
IYR (Real Estate) Winner for best looking in the aforementioned groups. Keep eyes here
XHB (Homebuilders)
GLD Even with the strong up day on Friday-it still has not cleared back over the 200 DMA
OIH (Oil Services) Amazing sideways action near the highs
XLE (Energy) Not as pretty as OIH but holding
XOP (Oil and Gas Exploration) Not as pretty as XLE or OIH-toppy looking
TBT (Ultrashort Lehman 20+ Year Treasuries) Subscribers: Possible good-looking slingshot low-will this be the one? We need confirmation
IFN (India Fund Inc.) Subscribers: Inside day-
EWP (Spain) Subscribers: Upgraded on Friday. Held the 10 DMA-like over Friday’s highs with risk to Friday’s low
FXI (China Large Cap Fund) Strong finish on Friday which makes this at least worth watching on Monday
TAN (Guggenheim Solar Energy) Subscribers: Closed above the 200 weekly moving average-also interesting
CORN (Corn) Subscribers: Over 35.00 looks good
BAL (Cotton) Subscribers: Will be watching this one too
FCG (First Trust ISE Reserve NatGas) Subscribers: Slingshot high
SGG (Sugar) Subscribers: Inside day under the 50 DMA-over 57.14 compelling
Bye for Now!