PLEASE SEE IMPORTANT LEGAL DISCLAIMER ON LAST PAGE

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Tamsyn Neal
5 years ago
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1 Today's Overview The S&P 500 hit a bull-market high at overnight and pulled back into economic data in Friday's premarket. Mixed news on inflation and industrial activity had little effect until a few minutes before the U.S. opening, when a steady sell wave hit the tape. Downward pressure intensified near the top of the hour, in reaction to much-weakerthan-expected Michigan consumer sentiment. The S&P 500 dropped straight to 1550 while the Nasdaq 100 dumped into two-week range support. It paused at those support levels for a few minutes and reversed gears in a V-shaped recovery that lifted above opening prints in the late morning. A rally wave 90 minutes later filled the S&P 500 gap and marked the intraday high, ahead of a long afternoon of seesaw price swings. Triple witching waited until Friday to deliver the goods, with volatile swings that cut through logical stops but never hit interesting buy levels. Case in point: I bought Aegerion Pharmaceuticals (AEGR) at $37.29 at 3:06.pm. EDT and watched it tick up to $38. The stock then dumped a point in just two minutes, bouncing at $37 and closing at $ I kept my wits and doubled up at a favorable price, but the strategy could have cost me money if the recovery wave had failed to hold into the close. The weak consumer reading reflects growing concern about the sequester. But Main Street is unlikely to change its spending habits, as long as home prices continue to rise while unemployment levels fall. So while the Michigan Sentiment survey gave phone participants a great opportunity to complain about their government, real-world buying patterns tend to follow more traditional pathways. The weekly index stochastics have flipped back to the buy side, after a false rollover earlier this month. This is not a surprise, given resilient price action and the failure of bears to turn the indices lower. Even so, the music will stop at some point and many warm bodies will be left scrambling for the exit at the same time. For this reason, avoid complacency and watch your positions closely, so you do not get left holding the bag. The PHLX Semiconductor Index (SOX) turned lower on Friday, selling off at 2012 resistance above 440. The index ended the session with a weekly shooting star reversal that could signal the end of its four-month rally. However, it will take at least two to four weeks to confirm the reversal, and a lot could happen between now and then. In the meantime, watch Intel (INTC) because the board's choice of a new CEO could set the sector's tone in the secnd quarter. (Continued on the next page) PLEASE SEE IMPORTANT LEGAL DISCLAIMER ON LAST PAGE

2 Let's take a short pause here, given this morning's sudden dip, and allow the market to recover early next week or to sell off to lower lows. The post-expiration session tends to reverse price action, so the S&P 500 could test the rally highs. However, few stocks hit low risk support levels this morning and most are not positioned to break out of trading ranges. This conflict suggests low opportunity while we wait for the next trend wave. I sold Synaptics (SYNA) into the opening rally, grabbing an excellent profit, and sat on my hands for a few hours, respecting expiration's well-deserved reputation for volatility. I bought AEGR in the late afternoon, as noted above, and ended the week with the stock $0.35 above my average entry. I am holding it over the weekend, along with Shutterfly (SFLY). 2

3 Random Notes: Bullet Points on the Market The euro rallied to declining channel resistance and turned lower into the U.S. close. Selling pressure hit transportation stocks after downgrades in the airline and trucking subgroups, but the sector still outperformed the S&P 500. Natural gas rallied into 50-week EMA resistance. It has not closed above this level since July The energy uptick continued, with oil service stocks getting more love than refiners. Wells Fargo (WFC) hit a four-year high. Apple (AAPL) shot higher in an expiration squeeze, rising more than 2.5% The KBW Banking Index (BKX) hit another high, despite pressure on JPMorgan Chase (JPM). Credit card processors closed near weekly lows. Amazon (AMZN) is testing support at the 50-day EMA for the fifth time since earnings. salesforce.com (CRM) ended Friday at a weekly low. 3

4 Daily Spotlight Freeport-McMoRan (FCX) sold off from $63 to $8 during the bear market and returned to the high in January 2011 after a V-shaped recovery. It then entered a slow pullback that accelerated in August of that year, dropping the stock into the upper $20s. It has posted two lower highs since that time but is still holding above the 2011 low, showing support around $31. FCX rallied 2% on Friday after a Goldman upgrade. It will take a rally above $44 to end the string of lower highs. An earlier buy signal, however, will come when the stock breaks above the monthly lower highs trend line with a buying spike through $40. In the meantime, the huge December gap remains partially unfilled, with many folks trapped at the upper end, waiting to dump positions. A good benchmark will come near $36, where the 200-day EMA aligns with the February swing high. * * * (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) 4

5 Watch List Aegerion Pharmaceuticals (AEGR) tested range resistance. See tonight's commentary and my notes. (long - 3/14/13) BroadVision (BVSN) closed above $10, issuing an initial buy signal. (long - 3/13/13) Kansas City Southern (KSU) tagged another high and pulled back. (long - 3/13/13) Sagamo Biosciences (SGMO) posted an inside day. (long - 3/11/13) Iron Mountain (IRM) started to pull back. (long - 3/8/13) Synaptics (SYNA) tested the January high and sold off, posting a wide range doji. See my notes. (long - 3/8/13) ValueClick (VCLK) sold off and closed near the low tick. (long - 3/7/13) Maximus (MMS) rallied to a new high and pulled back. (long - 3/5/13) Winnebago (WGO) pulled back and bounced into the close. See my notes. (long - 3/4/13) Eli Lilly (LLY) broke support and bounced strongly, closing back above support. (long - 3/1/13) Alon USA Energy (ALJ) is testing support at $ (long - 2/28/13) Cornerstone OnDemand (CSOD) sold off to the 20-day SMA in a last hour selloff. See my notes. (long - 2/27/13) Goldfield (GV) shows the outline of a triangle pattern at the rally high. (long - 2/27/13) Shutterfly (SFLY) has ground out a week-long basing pattern above $ (long - 2/22/13) Rock-Tenn (RKT) consolidated near the rally high and $90 strike. (long - 2/6/13) GenCorp (GY) rallied to another high and sold off, printing a graveyard doji. (long - 1/28/13) Fifth Third Bancorp (FITB) posted a bullish outside day after stress test results. (long - 1/25/13) (Continued on the next page) 5

6 Watch List continued Investment Technology Group (ITG) is trying to establish a higher low. (long - 1/14/13) Kohlberg Capital (KCAP) sold off and neared rising channel support. (long - 1/4/13) The SPDR KBW Bank ETF (KBE) filled Thursday's gap. (long - 1/2/13) Deere & Co. (DE) retraced Thursday's range. (long - 1/2/13) Celgene (CELG) sold off and could establish a new trading range. (long - 12/11/12) AOL (AOL) broke down and will be removed. Watch List Ticker I made money four out of five days this week, but the one bad day really hurt Two-day WGO action has established a trading range between $21.20 and $ AEGR posted huge volume during the last-hour flash crash BVSN's signal is not that strong because the push to $10 happened in the last few minutes. Monday should tell the tale KSI is acting sloppy at the high We now have two fat fingers on SYNA. Today's spike took place at the 78.6% selloff retracement. I think it is time for a consolidation or pullback I show VCLK support near $ CSOD posted high volume at day's end. The selloff has reached support, but it is unwise to fight momentum SFLY's opening rinse job looks good in the context of the trading range because it tagged the 20-day SMA KCAP's rising channel support around $10.20 should stop the bleeding Maybe LLY is done now and can move higher. 6

7 Guidelines and Frequently Asked Questions 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

8 Contact Info Customer Service: Please or call TSCM (8726) Mon. Fri. 8 a.m. to 6 p.m. ET; or outside the U.S. and in Canada, call Reader Feedback and Questions: Please send an directly to Alan at trader@hardrightedge.com. Again, please direct all account-related inquiries to customer service. Legal Information Please see the Terms of Use here. 8

PLEASE SEE IMPORTANT LEGAL DISCLAIMER ON LAST PAGE

PLEASE SEE IMPORTANT LEGAL DISCLAIMER ON LAST PAGE 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