QQQs And SPYs In Focus

• May 21, 2004
• Kevin Haggerty

What Thursday’s Action Tells
You

It was certainly a no-decision day, as the
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating), Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) and Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) all finished
within a point of the Wednesday closes. The SPX closed at 1089.18, still
within
that 10-day 1.0% closing price range. There was no real travel range
yesterday,
with the SPX trading sideways in a 7.2 point daily range. There was no real
program activity like Wednesday afternoon. The
(
QQQ |
Quote |
Chart |
News |
PowerRating) closed at 34.85,
+0.5%.

NYSE volume dropped to 1.2 billion, with the
volume ratio 44, breadth +550. There is nothing significant about the 4 MA
of
either one. None of the primary sectors distinguished themselves in either
direction. It sounds like a trader’s shutout pitch by the market, but not
quite
for all of the RST players.

 

Â	Friday 5/14	Monday 5/17	Tuesday 5/18	Wednesday 5/19	Thursday 5/20
IndexÂ
SPX Â
HighÂ	1102.37	1095.70	1094.14	1105.93	1092.62
LowÂ	1088.24	1079.36	1084.10	1088.49	1085.43
CloseÂ	1095.66	1084.08	1091.67	1088.67	1089.18
%Â	-.07	-1.1	+0.7	-0.3	+.05
RangeÂ	14.1	16.3	10.0	17.4	7.2
% RangeÂ	53	29	7.6	1	52
INDUÂ	10013	9907	9969	9938	9938
%Â	+.02	-1.1	+0.6	-0.3	0
Nasdaq Â	1904	1877	1898	1898	1897
%Â	-1.3	-1.5	+1.1	+.02	-.08
QQQÂ	34.75	34.42	34.73	34.69	34.85
%Â	-0.8	-1.0	+0.9	-0.1	+0.5
NYSEÂ
T. VOLÂ	1.34	1.43	1.35	1.54	1.21
U. VOLÂ	624	205	1.02	793	529
D. VOLÂ	695	1.20	317	729	669
VRÂ	47	15	76	52	44
4 MAÂ	56	40	46	47	47
5 RSIÂ	34	22	39	36	37
ADVÂ	1874	1042	2406	1791	1938
DECÂ	1440	2285	923	1524	1388
A-DÂ	+434	-1243	+1483	+267	+550
4 MAÂ	+599	-217	+118	+235	+264
SECTORSÂ
SMHÂ	-1.3	-1.1	+1.8	+0.4	-0.5
BKXÂ	+.09	-1.1	+1.0	+.03	+0.5
XBDÂ	+0.9	-2.1	+1.4	+0.7	-0.1
RTHÂ	-.07	-1.2	+2.0	-0.5	-.06
CYCÂ	-0.2	-1.8	+1.4	+.09	-0.6
PPHÂ	+0.5	-0.2	+.08	-0.8	-0.3
OIHÂ	+0.2	+0.2	-1.7	-0.2	-0.5
BBHÂ	-0.5	-0.9	+0.6	-1.3	-0.4
TLTÂ	+0.8	+0.9	-0.2	-0.3	+0.8
XAUÂ	+1.4	+0.3	+1.8	+1.8	-0.6

^next^

For Active
Traders

The decline into the 12:30 p.m. time period
set
up RST buys for the
(
SPY |
Quote |
Chart |
News |
PowerRating), QQQ and
(
DIA |
Quote |
Chart |
News |
PowerRating). The SPY made a 109.04 low
on
the 12:25 p.m. bar, then gave you an RST entry, at worst, above 109.31 that
traded to 109.91, closing at 109.62. The DIA was a better signal bar setup,
so
it was taken. It was a narrow-range signal bar with a 99.53 high and 99.42
low.
This was a lower common denominator entry because it was a tight stop below
the
narrow-range bar low. The DIA ran to 100.15, which was right at the 240 EMA.
The
other one taken was the QQQ with a 34.64 signal-bar high and 34.56 low.
After
entry, the QQQ got to 34.91 and the 240 EMA before closing at 34.85. All
three
choices had positive indicator divergence.

Today’s
Action

The SPX has been rangebound for the past two
weeks between the 30-week EMA of 1097.53, 40-week EMA of 1083.14 and the
200-day
EMA of 1080.88, so it has been a game of buying weakness on the emotional
order
flow accelerated by the incompetent TV media and then selling into strength.
Down at the five-minute-chart level, it is no different. The SPY, which
closed
at 109.62 is above its 20 and 60 EMAs at 109.58 – .59 and below the
equivalent
20 EMAs on the 60- and 120-minute charts of 109.80 and 109.88. Yesterday’s
closing range was about 109.80 – 109.40.

The QQQs have the 200-day EMA at 34.74,
40-week
EMA of 34.81 and then has five 20-period EMAs from the five-minute chart to
the
120-minute chart between 34.80 – 34.91. The 30-week EMA is up at 35.34.
There is
a traffic jam regardless of what chart you look at, but it does give you a
clear
picture to start the day.

The early futures at 7:15 a.m. ET are a bit
green, with the Dow +41, S&Ps +5.60 and Nasdaq +10.50, so there might be
some
more opportunity than yesterday.

Have a good trading day and a great
weekend,

Kevin Haggerty