In Play Today…
What Tuesday’s Action Tells
You
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) bounced off its
200-day
EMA on Monday, closing at 1087.12 and had some continuation yesterday, +0.8%
to
1095.49. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) was just +0.3% to 10,019, as the defensive
stocks
and drugs were red.
Technology has been the leader since 05/03
from
an oversold condition, and of course, led by the semiconductors, with the
(
SMH |
Quote |
Chart |
News |
PowerRating) +9.8% from a key zone and 34.50 05/03 low with the five-day RSI at
a
very short-term oversold condition of 12. There was an extension of the last
leg
up at 34.73 and the .382 retracement to the October 2002 low of 17.32 at
34.90.
Seventy percent of the SMH position was sold into yesterday’s rally with the
37.88 high and 200-day EMA at 38.16 and the five-day RSI now 76 after six
straight up days. Trailing stops on the balance are at -1.5% from each rally
high.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed at 1931,
+1.9%,
and re-crossed its 200-day EMA of 1915, while the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s were +1.5% at
35.19
(100% of position still on). NYSE volume was 1.53 billion, volume ratio 79
and
breadth +2021 (certainly helped by the TLTs +0.5%).
Yesterday’s SPX move came off the 4 MA of the
volume ratio at 26 and is still 31 after yesterday. I follow the Fidelity
Select
funds very closely as (although I am biased) they are simply excellent stock
pickers and probably have the most talented group of in-house research staff
in
the business. Since 05/03, the four funds that have a positive return are
the FSELX (Fidelity Select Electronics) and also the Network, Computer and
Technology Select funds.
If you look at a chart of FSELX (below), which has
led
all of the Select funds since 05/03, and compare it to the SMH chart, the
obvious deduction is it’s overweighted in semiconductors. And
(
INTC |
Quote |
Chart |
News |
PowerRating) at
+4.5% yesterday certainly helps both. FSELX closed at 39.82 yesterday,
+2.4%,
with its 200-day EMA at 39.95, which is also the down trendlines from the
April
44.94 high at 40.50. Looking at the SMH chart, you see that the April
trendline
was crossed above 36.75 and the 200-day EMA is 38.16 vs. the 37.80 close and
+2.7% day.
| Â | Wednesday
5/5 |
Thursday
5/6 |
Friday
5/7 |
Monday
5/10 |
Tuesday
5/11 |
Index |
|||||
| SPX Â |
|||||
High |
1125.07 | 1121.53 | 1117.33 | 1098.70 | 1095.69 |
Low |
1117.86 | 1106.20 | 1098.63 | 1079.63 | 1087.12 |
Close |
1121.58 | 1113.96 | 1098.69 | 1087.12 | 1095.49 |
%Â |
+0.2 | -0.7 | -1.4 | -1.1 | +0.8 |
Range |
7.2 | 15.3 | 18.7 | 19.1 | 8.6 |
% Range |
52 | 51 | 0 | 39 | 97 |
INDUÂ |
10311 | 10241 | 10117 | 9990 | 10019 |
%Â |
-.06 | -0.7 | -1.2 | -1.3 | +0.3 |
Nasdaq  |
1957 | 1937 | 1918 | 1896 | 1931 |
%Â |
+0.4 | -1.0 | -1.0 | -1.1 | 1931 |
| QQQÂ |
35.53 | 35.26 | 34.97 | 34.67 | 35.19 |
%Â |
+0.8 | -0.8 | -0.8 | -0.9 | +1.5 |
NYSEÂ |
|||||
T. VOLÂ |
1.47 | 1.51 | 1.65 | 1.91 | 1.53 |
U. VOLÂ |
811 | 297 | 182 | 276 | 1.19 |
D. VOLÂ |
635 | 1.20 | 1.45 | 1.62 | 318 |
VRÂ |
56 | 20 | 11 | 15 | 79 |
4 MAÂ |
53 | 51 | 37 | 26 | 31 |
5 RSIÂ |
49 | 37 | 23 | 17 | 33 |
ADVÂ |
1638 | 635 | 259 | 353 | 2703 |
DECÂ |
1647 | 2720 | 3184 | 3099 | 682 |
A-DÂ |
-9 | -2085 | -2925 | -2746 | +2021 |
4 MAÂ |
+157 | -226 | -1128 | -1941 | -1434 |
SECTORSÂ |
|||||
SMHÂ |
+0.4 | +0.3 | +1.2 | +1.0 | +2.7 |
| BKXÂ |
+.06 | -1.3 | -2.4 | -1.6 | +0.4 |
XBDÂ |
-0.5 | -1.9 | -2.7 | -0.5 | +2.3 |
RTHÂ |
+0.3 | -1.9 | -2.1 | +1.0 | 0 |
CYCÂ |
-.05 | -1.6 | -2.5 | -1.7 | +1.5 |
PPHÂ |
+0.3 | +0.2 | -0.6 | -1.5 | 0 |
OIHÂ |
-1.4 | -1.8 | -2.9 | -2.9 | +1.2 |
| BBHÂ |
+1.9 | -2.0 | -1.8 | -1.4 | +1.7 |
TLTÂ |
-0.3 | -0.3 | -1.3 | -0.2 | +0.5 |
| XAUÂ |
-2.2 | -2.6 | -4.3 | +2.4 | +1.9 |
For Active
Traders
(
IWM |
Quote |
Chart |
News |
PowerRating) — the Russell 2000 –Â was a
focus into yesterday with the 108 zone a key level and RST setup above
108.76.
Intraday entry was on a re-cross of the 108.11 200-day EMA on the 9:35 a.m.
ET
bar and kept as an RST position because it closed at 109.25 above the 108.76
high of the low day, which also had a five-day RSI at 11.46. The IWM hit a
109.60 intraday high, so certainly daytraders that played the 200-day EMA
re-cross did well. Trailing stops are now above breakeven.
Yesterday’s gap opening didn’t give traders
much
to work with in the major indices.
Today’s
Action
The question of where is the SPX going to me
is a
“I don’t know or care” now because the index/HOLDR positions were
entered
correctly at oversold levels and are now green with trailing stops above
breakeven. Should there be a move back to the 1140 – 1150 level (don’t think
so
right here), the June out-of-the-money premiums will be sold again. The next
key
time zone is around June 15, and that will probably present another good
position opportunity.
The initial focus today is 108.11 IWM, 1915
Nasdaq, 108.41 SPY, which closed at 109.75 in an RST position after the
bounce
off the 108.36 rising 200-day EMA on Monday (so you had a carryover long
into
yesterday’s gap opening). For the DIA, which closed at 100.24, it is 100.20.
These are all 200-day EMAs, so it gives daytraders flexibility both long and
short. The XAU has retraced to the .618 retracement zone of its 07/26/02 low
of
54.67. It bounced off that level on Monday and had some continuation
yesterday, closing at 81.48, +1.9%. Certainly a rally to its now declining
200-day EMA of 93.65 is a possibility.
(
NEM |
Quote |
Chart |
News |
PowerRating) is a major precious metal holding
for
the Generals and has retraced 50% to its 20.80 07/24/02 low, down from the
rally
high and double top of 50.28 and 50.20. It closed at 36.70 with the 200-day
EMA
at 40.85, so it is in play again and goes on the focus list along with any
similar gold setups for a reflex from this area.
Have a good trading day,
Kevin Haggerty
