QQQs In Focus
What Tuesday’s Action Tells
You
It was up in price for the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) at
+0.7%, and a close at 1091.67, while NYSE volume declined to 1.35 billion.
Not
the kind of market action we like to see. The volume ratio was 76 and
breadth
+1483, both positive, but it was more like sellers walked away to let it
lift.
The 4 MA of the volume ratio and the A – D were neutral at 46 and +118, so
nothing to hang your hat on.
In the primary sectors, the
(
SMH |
Quote |
Chart |
News |
PowerRating)s were
+1.8%
from an oversold condition, but the volume was only 16.9 million, the lowest
up
day since 15.9 million on 04/19/04. The retracement off the 34.50 low ran to
37.88, and we did catch that move, but that faded just under its 200-day EMA
of
38.10 at the time. The 37.88 high was made on 25.1 million shares, but the
change-in-direction day which followed the high was on 40.4 million shares,
closing down at 37.29 from 37.80, and that move was over. Volume declined
the
next four days, including yesterday, and the SMH closed at 36.61. The 20-day
EMA
is just above at 37.04, so nothing good can happen without an increase in
volume, along with price.
The RTH was +2.0%, led by
(
HD |
Quote |
Chart |
News |
PowerRating), +3.4%,
then
(
LOW |
Quote |
Chart |
News |
PowerRating), +2.9%, both on significant increases in volume.
(
TGT |
Quote |
Chart |
News |
PowerRating) was
+2.9%
also. The other leaders were the brokers (XBD), +1.4%, but some of them had
significantly less than average volume. The CYC was +1.4%, led by
(
AA |
Quote |
Chart |
News |
PowerRating),
+3.6%, on a significant increase above its average daily volume. The XAU was
+1.8%, and as you know, that remains a primary focus from the oversold
condition.
This is an option expiration week, then we
have
the Memorial Day long weekend coming up, so there might be some herky-jerky
moves in the major indices over the next eight days.
Â
| Â | Wednesday
5/12 |
Thursday
5/13 |
Friday
5/14 |
Monday 5/17 |
Tuesday 5/18 |
Index |
|||||
| SPX Â |
|||||
High |
1097.55 | 1102.77 | 1102.37 | 1095.70 | 1094.14 |
Low |
1076.32 | 1091.76 | 1088.24 | 1079.36 | 1084.10 |
Close |
1097.26 | 1096.47 | 1095.66 | 1084.08 | 1091.67 |
%Â |
+0.2 | -.07 | -.07 | -1.1 | +0.7 |
Range |
21.2 | 11.0 | 14.1 | 16.3 | 10.0 |
% Range |
95 | 43 | 53 | 29 | 7.6 |
INDUÂ |
10045 | 10012 | 10013 | 9907 | 9969 |
%Â |
+0.3 | -0.3 | +.02 | -1.1 | +0.6 |
Nasdaq  |
1926 | 1926 | 1904 | 1877 | 1898 |
%Â |
-0.3 | 0 | -1.3 | -1.5 | +1.1 |
| QQQÂ |
35.26 | 35.01 | 34.75 | 34.42 | 34.73 |
%Â |
+0.2 | -0.7 | -0.8 | -1.0 | +0.9 |
NYSEÂ |
|||||
T. VOLÂ |
1.70 | 1.41 | 1.34 | 1.43 | 1.35 |
U. VOLÂ |
851 | 658 | 624 | 205 | 1.02 |
D. VOLÂ |
807 | 739 | 695 | 1.20 | 317 |
VRÂ |
51 | 47 | 47 | 15 | 76 |
4 MAÂ |
39 | 48 | 56 | 40 | 46 |
5 RSIÂ |
36 | 35 | 34 | 22 | 39 |
ADVÂ |
1732 | 1559 | 1874 | 1042 | 2406 |
DECÂ |
1589 | 1761 | 1440 | 2285 | 923 |
A-DÂ |
+143 | -202 | +434 | -1243 | +1483 |
4 MAÂ |
-877 | -196 | +599 | -217 | +118 |
SECTORSÂ |
|||||
SMHÂ |
-1.3 | -1.1 | -1.3 | -1.1 | +1.8 |
| BKXÂ |
+1.3 | +0.1 | +.09 | -1.1 | +1.0 |
XBDÂ |
+0.5 | -0.3 | +0.9 | -2.1 | +1.4 |
RTHÂ |
+0.4 | -0.5 | -.07 | -1.2 | +2.0 |
CYCÂ |
+0.1 | +0.6 | -0.2 | -1.8 | +1.4 |
PPHÂ |
+0.2 | -0.6 | +0.5 | -0.2 | +.08 |
OIHÂ |
+0.4 | +0.9 | +0.2 | +0.2 | -1.7 |
| BBHÂ |
+1.2 | +0.2 | -0.5 | -0.9 | +0.6 |
TLTÂ |
-0.7 | -0.4 | +0.8 | +0.9 | -0.2 |
| XAUÂ |
-1.0 | -0.8 | +1.4 | +0.3 | +1.8 |
^next^
For Active
Traders
The gap opening eventually took the air out
of
the long side for us in the major indices as there were no real retracements
to
play. The short trades taken on the SPX .618 retracement to 1094.14, which
is
between the previous significant high of 1102.37 and yesterday’s 1079.36
low.
That short fade went nowhere to 1090.33, then sideways into the 1091.53
close.
The
(
QQQ |
Quote |
Chart |
News |
PowerRating)s opened up at 34.66 from 34.42,
then hit a 34.90 intraday high, but then drew a line between 34.83 – 34.70
from
1:15 p.m. – 4:00 p.m. ET, so nothing to do there. The QQQ closed at 34.73,
which
is also the 200-day EMA. The +0.9% gain was on the lightest volume since
04/19/04.
Today’s
Action
The
(
SPY |
Quote |
Chart |
News |
PowerRating) had a closing range of 109.80 –
109.60, closing at 109.65. The upper line is also the 20-period EMA on the
120-minute chart. The breakout of the range could run to the .786 zone at
110.20
– .25. For the past seven days, the SPY has bounced off the 200-day EMA
three
times. The seven-day high-low range is 110.81 – 108.06. The more price hits
a
line, the weaker it gets, and the fourth time it will pick up some speed.
The
200-day EMA is 108.47, so if price drops to that level again, be ready for a
double up and reverse if it bounces, then reverses below the
line.  Â
On the upside, above the seven-day range, you
have the declining 20- and 50-day EMAs at 111.11 and 112.09, so any intraday
short setups at the high end of the range can be taken if the dynamics look
right. If you take long setups at the 200-day EMA zone, keep tight stops,
and as
I said, be ready to reverse.
The QQQ closing range was 34.83 – 34.70 with
the
closing price at 34.73 on the 200-day EMA, so the early focus is obvious,
subject to the morning futures activity. I am doing this Tuesday night for
Wednesday.
Have a good trading day,
Kevin Haggerty