Tuesday, April 29, 2014

New Highs in Dow Possible

  As we are nearing the end of an upswing that began April 11 it is becoming clear that a rotation is taking shape from small caps into the large caps. The Dow is poised to take out the highs from April 4th, while the Russell 2000 could easily breakdown and retest February 5 lows.

  SPY - Sideways consolidation is likely for the next few days. After that this is the place to look for new highs

  DIA - looks even better then SPY. New highs likely

  IWM - Inside day (entire yesterday’s range within today’s range). It is somewhat oversold so unless we fall thru the 200 day moving average, we could see a bounce soon.

  QQQ- is similar to IWM, but much stronger. My best guess is 1-3 more down to sideways days, followed by a bounce higher. Important resistance is at $88.21

  TLT-lots of important economic news this week and a Fed statement that is sure to reverberate here. TLT tested the 20 day exponential moving average (EMA) and held it for now.

  EEM-rebounded for a second day in a row and gapped up at the open. Still thinking that we will see lower prices first before the higher once

  Gold-formed a doji spinning top candlestick on the daily chart, indicating indecision. Its just that-indecisive

  GDX rose 1.33%. Will the gains hold? Decent support is at $23.04

  IYR is pushing higher

  Oil tried to rally, but was met with selling. A close below 100.33 would be bearish and open the door to prices around $98

  Natural gas may have broken to the upside from the bullish flag consolidation pattern. Initial target is $5

  Open positions: TLT, IYR, NUGT, EEM, DIA, UGAZ

  Closed positions: QQQ, IWM

Monday, April 28, 2014

The Moment of Truth for Small Caps.

  Indices were mixed today with large caps and blue chips gaining while the small caps underperformed again. IWM today touched the 200 day moving average (DMA), but pulled back with what appears to be a hammer candlestick.            Failure here would be rather bearish for the small caps.

  Market breadth deteriorated slightly more, especially for the NASDAQ, but it may be approaching oversold levels and a breadth thrust should commence soon.

  SPX reaffirmed support in the 1850 area. Initial resistance is at 1897

  NASDAQ may be finding support in the 4000-4070 area. It may retest the upward sloping 200 DMA currently at 3967 before rebounding to first resistance at 4177.

  The DOW looks strong and new highs are very much possible

  TLT confirmed a shooting star from Friday and may head lower. It is already at first support. Next support is at $109.98

  EEM may have made the bottom for now, but still looks rather weak.

  Gold had an inside day. A breakout in either direction should clarify which way it would go.

  GDX lost almost 2 percent, but held support for now. Next resistance is at $24.48. I am mildly bullish on gold and GDX

  IYR keeps pushing higher

  Oil probably stopped correcting. Next support is at $98.86, while strong resistance is at $104.99

  Natural gas had a good day and gained over 2%. It almost broke above the bull flag it is tracing out. A close above $4.80 would open the door to at least $5

  Open positions: IYR, TLT, EEM, NUGT, QQQ, TNA, DIA, UGAZ

  Bottom line: General markets are bullish, but further weakness may cause a sell-off in small caps