PLEASE SEE IMPORTANT LEGAL DISCLAIMER ON LAST PAGE

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Ellen Parker
5 years ago
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1 Today's Overview The S&P 500 ground sideways overnight into Wednesday and turned higher after the start of the U.S. session, rising to 1160 over the lunch hour. The Nasdaq 100 underperformed in the morning ramp and throughout the day, failing to push above yesterday s high in a bearish divergence. Both indices seesawed through the afternoon session, pulling back for two hours and then bouncing strongly into the close. The S&P 500 has pushed through the top weekly Bollinger Band for the first time since September That event signaled a decline that dropped the index about 150 points. The S&P has pierced the top band just three other times since 2010, with each occurrence preceding a notable downturn. Given the bearish placement, I am expecting a high between today s peak and 1665 that could mark a significant intermediate top. With the main indices at major resistance, it is a bad time to add to long positions. Rather, stops need to be tightened and profits taken on marginal performers. It may even be appropriate to sell big winners that are overextended after vertical run-ups. I know it is hard to imagine the downside after the seemingly endless up days. But the forces of gravity have yet to be repealed and we are way overdue for a shakeout or correction. Apple (AAPL) bottomed out near $390 on April 19 and entered a recovery wave that stalled near $467 about three weeks later. That peak failed to end the string of lower highs in place since September Over the last two sessions, intense selling pressure has dropped the stock more than 25 points and broken through support at the 50-day EMA. This bearish action confirms that the downtrend is still in force, with exposure down to last month s low. The same holds true with gold, which fell more than 2% on Wednesday. SPDR Gold Shares (GLD) broke support at $150 in April and plunged to $130.It bounced for two weeks, consolidated for another two weeks and sold off on May 10. Downside pressure has intensified this week, with the decline retracing more than 62% of the prior bounce, after failing at 20-day SMA resistance. This exposes far lower prices in the weeks ahead. I sold Republic Airways (RJET) and Costco (COST) into their morning ramps and bought back RJET in the afternoon at a lower price. I am still holding Electronics For Imaging (EFII). In the opening minutes, I bought incontact (SAAS) and am holding that stock as well. PLEASE SEE IMPORTANT LEGAL DISCLAIMER ON LAST PAGE

2 Random Notes: Bullet Points on the Market Apple s (AAPL) downside has aligned nicely with Nasdaq 100 resistance at The Market Volatility Index (VIX) flashed green once again during the S&P 500 morning rally. Transportation stocks outperformed while the energy complex sold off. Airlines led the transportation stocks higher. Copper continued to lose ground and could test the downtrend low. Market Vectors Coal ETF (KOL) is testing the downtrend low. Macy s (M) hit an all-time high after earnings. Banks were solid as a rock. Google (GOOG) scooped up capital coming out of Apple, rising more than 28 points. 2

3 Daily Spotlight Allegheny Technologies (ATI) could offer a good short sale if the broad market enters an intermediate downturn. It turned lower in May 2011 after retracing about 50% of its bear market decline. Downside pressure has slowed in recent months but the downtrend continues unabated. The stock tested the 2012 low in April and bounced into the 50-day EMA, where it has been consolidating for the last six sessions. A rollover at this resistance level should yield a trip back to the low and a possible breakdown through long-term support in the mid-$20s. The stock bottomed out near $16 in the bear market and that level could come back into play if support is broken. Not surprisingly, the entire steel group looks terrible right now, with worldwide industrial production failing to ramp up to levels posted in the last decade. * * * (Spotlight presents updated index analysis, quick takes on reader favorites and fresh views of active picks. The section belongs to our subscribers, so let Alan know what charts you would like to see by sending him your requests at trader@hardrightedge.com. Please note that Alan can t answer all of your requests due to time and space restrictions. Spotlight stocks are not recommendations to buy or sell, and will not be placed on the Watch List.) (See Watch List on the next page) 3

4 [Up. Watch List Methanex (MEOH) is testing the breakout level. (long - 5/14/13) Weatherford International (WFT) bounced along eight-day support. (long - 5/13/13) Costco (COST) rallied to another high. (long - 5/10/13) incontact (SAAS) bounced at gap support. (long - 5/9/13) CBS (CBS) posted an inside day at the $50 strike. (long - 5/9/13) McDonald s (MCD) pushed above the 20-day SMA. (long - 5/7/13) Republic Airways (RJET) bounced at triangle support and stalled at the 20-day SMA. (long - 5/6/13) FedEx (FDX) stalled at the $100 strike. (long - 5/3/13) Universal Health Services (UHS) tagged another high. (long - 5/2/13) Cheniere Energy (LNG) stalled at the $30 strike. (long - 5/2/13) JinkoSolar (JKS) bounced strongly and sold off into the close. (long - 5/1/13) Electronics For Imaging (EFII) stalled at the 20-day SMA. (long - 4/9/13) Boston Scientific (BSX) rallied to another high. (long - 4/5/13) Aegerion Pharmaceuticals (AEGR) posted an inside day. (long - 3/14/13) Iron Mountain (IRM) continued to pull back. (long - 3/8/13) Fifth Third Bancorp (FITB) rallied to another high. (long - 1/25/13) Celgene (CELG) consolidated at a new high. (long - 12/11/12) 4

5 Watch List Ticker RJET s volume came in below Tuesday s level. A higher high looks likely before the next pullback Apparently, EFII is in no hurry to do anything COST is overextended, compared with its typical trading pattern WFT is winding up nicely SAAS did not confirm a reversal but it took a step in the right direction. Watch out for resistance above $8.50 JKS s bearish tweezer pattern shows aggressive sellers above $

For guidelines about the best way to use The Daily Swing Trade and for answers to the questions readers ask most often, a guide, "Your Questions Answered About Swing Trading," has been

6 For guidelines about the best way to use The Daily Swing Trade and for answers to the questions readers ask most often, a guide, "Your Questions Answered About Swing Trading," has been created. For the guide, click here: Farley s latest book, The Master Swing Trader Toolkit: The Market Survival Guide, was released in April

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Today's Overview. I took a nice piece out of the Phillip Morris (PM) bounce but chose not to hold the position overnight. I cannot wait for September.

Today's Overview. I took a nice piece out of the Phillip Morris (PM) bounce but chose not to hold the position overnight. I cannot wait for September. Today's Overview Sellers remained in control overnight, with risk adversity growing in response to a flood of European sound bites about the fate of Greece and European Central Bank bond buying. The euro