Learn These First Hour Strategies

The SPX ($SPX.X | Quote | Chart | News | PowerRating) closed almost unchanged yesterday at 1213.45 with NYSE volume again "holiday light" at 926 million shares. The volume ratio was 57 and breadth +472. The Dow ($INDU | Quote | Chart | News | PowerRating) finished at 10,829, -0.2%, with the Nasdaq ($COMPQ | Quote | Chart | News | PowerRating) unchanged at 2177 and the (QQQQ | Quote | Chart | News | PowerRating) +0.1% at 40.02.

The green side was led by the (SMH | Quote | Chart | News | PowerRating), +1.1%, which gave traders good trade-through entry above 32.88 as the SOX re-crossed the 40-week EMA at 426.46. The 32.88 breakout was out of a Slim Jim between 32.88 - 32.76 from 11:30 a.m. ET Tuesday until the breakout yesterday morning. You were ready for it, so I hope you took the trade. Entry in the SMH was no later than the 9:35 a.m. bar, and if you kept scrolling the semis for First-Hour strategies, you picked up defined trades, like (KLAC | Quote | Chart | News | PowerRating) which broke out of a Flip Top (see chart) above 45.98 on the 10:00 a.m. bar and ran to 46.75 on the 11:20 a.m. bar and finally closed at 46.25.

Traders of the S&P 500 futures had a no-travel-range day with the daily range just 3 points between 1213.95 - 1210.95. There is no spin there, as the Generals were able to hold yesterday's gains. The Dow was weaker as it traded down 59 points from the previous close to a 10,796 intraday low, then traded up into the 10,829 close.

There are two trading days left in 2004 with the QQQQ, (SPY | Quote | Chart | News | PowerRating), (DIA | Quote | Chart | News | PowerRating), (IWM | Quote | Chart | News | PowerRating) and Nasdaq all trading above rising 10-, 20-, 50- and 200-day EMAs, so no market commentary needed, unless, and until, that scenario has some change in direction at the top end.

This is being recorded Wednesday night for Thursday, but I don't expect any big red futures in the morning in the absence of any overt news, but if so, scroll for retracement long setups.

The next commentary will be in 2005 as I am heading North in the morning, so I wish you all a safe, prosperous and happy New Year.

Have a good trading day,

Kevin Haggerty