Market Analysis for Trading on 4/5/2013

Mish Schneider | April 4, 2013

New Trade Alert

Trade IYT Buy Stop 107.36 Limit 107.46

Instrument Name: iShares DJ Transport Average Industrial Fund

Position: Long

Stop: 105.29

Target:  110 Take partial profit

Trade Description: After a correction from the highs, a move over the 50 DMA lines up with R1 and today's high. Longer term trend still intact in what has been a strong sector this year. Therefore, like a 1.5 ATR risk to make at least that plus a possibility of a much higher move if the market stays positive

Open Trade Update

Existing Position: QQQ 69.02 Long

Stop: 67.79 (For those who did not use the tighter stop)

First Target: Let's get positive first

Market Analysis for 4/5/2013

A constructive session given some more bad economic data and North Korea in the headlines. Friday's job report, I will venture to speculate, is already factored in for worse rather than unchanged or better. Therefore, the surprise could be on the upside if today's technical signals follow through. The Dow had an inside day making a brick wall high possibility more suspect, especially since it held the fast moving average. The Russell 2000 peeked its head over the 50 DMA which is exactly the scenario I wrote about last night: "Sometimes, when instruments get a return move through the 50 DMA, it offers a good low risk long entry." With some confirmation (a hold of the 50 DMA), anything can still happen as the S&P 500 and NASDAQ remain in bullish phases very close to the all-time highs. One caveat-bonds. As signs of a "flight to quality" remain, full blown, buy, buy, buy sentiment also remains at bay.  

S&P 500 (SPY) Inside day. No real damage done at this point. Subs: Neutral pivots

Russell 2000 (IWM) Inside day. Unconfirmed Bull phase-if the 50 holds, everyone back in the pool! Subs: Pivots still slightly negative

Dow (DIA) Inside day. Held the fast moving average.  Subs: Pivots Positive

NASDAQ 100 (QQQ) Only one that did not have an inside day. Got closer to the 50 DMA before bouncing just shy of the fast moving average. Subs: Pivots negative and today's and R1 line up over the 10 DMA

ETFs:  

GLD  Closed over 150 for now. Possible slingshot low only if today's low holds.

XLF (Financials) Inside day on the 50 DMA. A definite follow the range break setup  

IBB (Biotechnology) Did not confirm the brick wall high and had an inside day.

SMH (Semiconductors) Held 34.00 after testing 33.92, which was the low on January 17th, the day it gapped higher. Still in warning phase. Subs: I bought a small starter position and will add over R1 34.44

XRT (Retail) After today's rally, thinking those double tops at 70.81 will be history. Subs: Pivots Positive

IYT (Transportation) Confirmed warning phase, but right under the 50 DMA.  

IYR (Real Estate) "Probably the first place to look if the sharks swim away." How true that turned out to be! New highs!!!

USO (US Oil Fund) From an unconfirmed warning phase to an unconfirmed distribution phase.

OIH (Oil Services) Like SMH, held the support from the mid-January gap higher.

XLE (Energy) Under the 50 DMA substantially so needs some work now before a new direction up or down

TBT (Ultrashort Lehman 20+ Year Treasuries) The party pooper.  Until it clears the 200 DMA

XOP (Oil and Gas Exploration) Doji and want to see if it can clear 58.00

XHB (Homebuilders) Subs: Inside day

UUP (Dollar Bull) Golden Cross and a nasty looking red candle.

 

Bye for Now!