Focus List: Stocks To Scroll Each Day
What Tuesday’s Action Tells
You
I liked yesterday’s market action less than
Monday’s. The casino lit up at 2:15 PM for 40 minutes, then the lights went out
just as fast as the major indices reversed in price to about where the game
started after the Federal Reserve meeting. The SPX finally closed 1119.51,
+0.2%, while the Dow was almost flat at 10317, up 3 points. The Nasdaq went out
at 1950, +0.6%, and the QQQ, 35.25, +0.4%. The day’s trend in volume and price
was similar to Monday, except weaker. NYSE volume advanced to 1.67 billion from
1.57 billion on Monday. The volume ratio was similar at 63, and breadth dropped
to +506. Once again, the up-volume was concentrated on fewer stocks, as the
tunnel remains narrow. In addition, the SPX closed below its midpoint.
The Semis led the primary sectors with the SMH,
+1.7%, from an oversold condition. The TLT, -0.7%, and XAU, +5.3%, both moved on
the Fed noise. I have included the daily chart for the Nasdaq composite, which
closed at 1950. Despite the volatility, it is still trading above its rising
200-day EMA, which is now 1914. Technology has led this decline, with the SMH
hitting its rally high of 45.78 on 01/13/04, the QQQs on 1/20/04, then the
Nasdaq at 2154 on 01/26/04. It initially declined -12% to 1897, then rallied
+10% to 2079, and now the recent decline at -8% to 1919. For a significant
trading opportunity I would like to see the 1897 low taken out, in addition to a
rising 200-day EMA. That would shake the tree.
| Â | Wednesday
4/28 |
Thursday
4/29 |
Friday
4/30 |
Monday
5/3 |
Tuesday
5/4 |
Index |
|||||
| SPX Â |
|||||
High |
1138.11 | 1128.61 | 1119.26 | 1118.72 | 1127.74 |
Low |
1121.70 | 1108.07 | 1107.23 | 1107.30 | 1112.89 |
Close |
1122.41 | 1113.88 | 1107.30 | 1117.56 | 1119.51 |
%Â |
-1.4 | -0.8 | -0.6 | +0.9 | +0.2 |
Range |
16.4 | 20.5 | 12.0 | 11.4 | 14.8 |
% Range |
4 | 28 | 0 | 90 | 45 |
INDUÂ |
10343 | 10272 | 10226 | 10314 | 10317 |
%Â |
-1.3 | -0.7 | -0.5 | +0.9 | +.03 |
Nasdaq  |
1990 | 1959 | 1920 | 1939 | 1950 |
%Â |
-2.1 | -1.5 | -2.0 | +1.0 | +0.6 |
| QQQÂ |
36.22 | 35.64 | 34.77 | 35.10 | 35.25 |
%Â |
-1.8 | -1.5 | -2.4 | +1.0 | +0.4 |
NYSEÂ |
|||||
T. VOLÂ |
1.86 | 1.86 | 1.63 | 1.57 | 1.67 |
U. VOLÂ |
247 | 405 | 468 | 1.01 | 1.04 |
D. VOLÂ |
1.6 | 1.4 | 1.14 | 537 | 603 |
VRÂ |
13 | 22 | 29 | 65 | 63 |
4 MAÂ |
35 | 30 | 29 | 32 | 45 |
5 RSIÂ |
34 | 27 | 22 | 42 | 45 |
ADVÂ |
784 | 869 | 1354 | 1997 | 1904 |
DECÂ |
2524 | 2444 | 1909 | 1312 | 1398 |
A-DÂ |
-1740 | -1575 | -555 | +685 | +506 |
4 MAÂ |
-810 | -949 | -872 | -796 | -235 |
SECTORSÂ |
|||||
SMHÂ |
-1.5 | -2.6 | -1.7 | -0.4 | +1.7 |
| BKXÂ |
-1.5 | -0.3 | -.07 | +0.8 | +0.6 |
XBDÂ |
-2.3 | -1.4 | -1.4 | +0.8 | +0.8 |
RTHÂ |
-0.9 | -1.0 | -0.6 | +0.6 | -0.5 |
CYCÂ |
-2.3 | -1.9 | -0.5 | +0.7 | +0.7 |
PPHÂ |
-0.5 | -0.7 | +.03 | +1.3 | +0.4 |
OIHÂ |
-2.0 | -3.4 | -0.2 | +2.3 | -0.9 |
| BBHÂ |
-1.9 | -1.6 | -0.3 | +0.4 | -1.1 |
TLTÂ |
-0.9 | -0.5 | +0.4 | +0.1 | -0.7 |
| XAUÂ |
-7.1 | +1.0 | -0.2 | +0. | +5.3 |
^next^
The next zone below 1897 is the AB=CD level of 1822, then you have the .382
retracement to the 10/02 low at 1754. The RST can only set up if the 1897 low
is taken out first, and that is just -2.7% form its 1950 close which is just a
small air-pocket move down. Also, just above, price runs back into the 1990-2000
resistance and then the downtrend line at about 2050. Either way, there is a
potential short opportunity and then a zone where it might reverse with a
long-side trade.
I have also included the IWM (Russell 2000)
chart, which highlights the approximate 8% trading range for all of 2004. The
breakout to 121.15 was weak, as price was advancing and volume declining. I like
to play the low end of this range because the risk/reward is good because your
entry is just above your stop and you have the option of reversing to the short
side below 111.50 when the IWM can slide to the 200-day EMA at 108.
For Active Traders
The day was sideways for the major indices until
the 2:15 PM elevator up-and-down into the 4:00 PM close. If you played in that
casino, I hope you did OK. There were better opportunities in some individual
broker stocks before the 2:15 casino opened, i.e. GS (on a gap pullback), BSC
(Fib retracement) and the same for MWD, which closed up +2%. It was also the
same for some semis like MCHP, +3.9% on the day.
For Today
The SPX closed at 1119.51, with initial
resistance at 1126.08 and 1126.78, which are the 20- and 50-day EMAs.
Yesterday’s high failed at 1127.74. The Dow has resistance at 10366 and 10380
and closed at 10317, having traded at an intraday high of 10386. The QQQs hit
35.75, with current resistance at 36 and 36.15, but closed down at 35.25. The
200-day EMA is below at 34.71.
Some stocks I have added to the trading focus
list are: DGX, YUM, MMM, SYK, COP, ITW, FDC, APOL, COH, PBI, ZMH, GTK, AGN, APC,
APA, SII, AHC, CVX, XOM, and SUN.
These are all stocks that are trading better than
the market and at-or-above their 20, 50 and 200-day day EMAs. Just because they
go on the current list doesn’t mean they necessarily set up after yesterday’s
action, but for sure will be scrolled for each day for intraday setups. The
semis and brokers, because of their oversold levels, continue to be a primary
focus, and for the short side I favor the indices today. I will also give you an
individual stock short focus list and add to each list as I see it.
Have a good trading day,
Kevin Haggerty
Editor’s note:Â Kevin did this commentary
Tuesday night for Wednesday.
