Trading The Primary Components Of The SPDR
What Thursday’s Action Tells
You
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) made its third higher
close at 1100.43, or +0.5%. The intraday high was 1103.71 vs. the 20-day EMA
at
1104.85 and the 50-day EMA at 1113.36. NYSE volume was okay at 1.53 billion,
with the volume ratio 72 and breadth +1376, which were both very positive.
The 5 RSI is now 57 coming off Monday’s short-term oversold condition at 21 and
also a
three-month extended standard deviation zone. The 4 MA of the volume ratio
was
27 and 4 MA of breadth -1200.
I don’t know if the Generals/Program Gang can
get
the SPX to even on the year today, which is 1111.92, but it is only a +1.0%
move
from Thursday’s close. Nevertheless, short-term traders have had an
excellent
three days as measured by my strategies and their entry levels, but that is
history after three straight up days. Now we have to also be aware of the
short
setups, and any carryover profitable long positions should have trailing
stops
moved up fairly tight. You should have also rung the register by now on a
good
percentage of your profitable positions that were bought when most everyone
else
was bailing out and getting short last Monday (the herd).
It was semis leading with a +3.4% day for the
(
SMH |
Quote |
Chart |
News |
PowerRating) with
(
INTC |
Quote |
Chart |
News |
PowerRating) gaining +3.3% to a 24.45 high and closing at
24.24.
The 20-day EMA was 24.37. FYI:Â INTC has advanced +5.9% entry to high
since
the breakout of the dynamite triangle on Tuesday, which you were alerted to,
as
the narrow-range third day on Monday had the most volume of the previous six
days, and INTC closed up +1.3%, diverging from the SMH, which was -0.7% and
SPX
-0.2%. The buying and selling pressure information is all explained in the
“Stock Selection” section of the 777-page seminar
manual.
The brokers, +1.4%, and
(
CYC |
Quote |
Chart |
News |
PowerRating), also
+1.4%,
followed the semis, and I would guess there is some price pushing by the
Generals into month’s end in those sectors.
For Active
Traders
It was a gap-up opening for the major
indices,
and I have included the
(
QQQ |
Quote |
Chart |
News |
PowerRating) five-minute chart which outlines the
first-hour 50% Gap Pullback strategy at 34.54 which carried up to 34.91
twice,
then declined to 34.50 and made a 2:30 p.m. ET program-initiated move to
34.88.
The resistance previously outlined is the 12-month EMA at 34.88, 233-day EMA
at
34.91, 200-day EMA at 35.18 and the 20-day EMA at 35.13. The 50-day EMA is
up at
35.65. The QQQ closed at 34.78, so you know where any intraday short setups
will
probably occur on any early upside move.
When the XLB, +1.3% yesterday, pulled back to
the
25.05 200-day EMA, you were alerted to get involved, or else use focus-list
stocks like
(
APD |
Quote |
Chart |
News |
PowerRating),
(
PX |
Quote |
Chart |
News |
PowerRating) and
(
IP |
Quote |
Chart |
News |
PowerRating). I have included the APD daily
chart,
which was also a trade setup at the 200-day EMA with the XLB and is one of
the
primary XLB components. APD led the XLB stocks yesterday at +4.3% on good
trade-through entry above Wednesday’s high. If you check your five-minute
chart,
you will see the two follow-up trades as outlined in the manual. There was a
First-Consolidation Breakout to New Intraday Highs above 50.46, then a
Slim Jim above 51.05 which traded up to a 52.13 high, closing at
51.95.
PX (Praxair) is another focus-list stock for
the
XLB, and you can see the 50-day EMA retracement setup when the XLB was down
at
the 200-day EMA. This relative outperformance made it an excellent daily
chart
trade selection, especially since the 20-day EMA > 50-day EMA >
200-day EMA.
Review the Above- and
Below-the-Line
stock selection information in the manual.
Today’s
Action
It is the last day of the month, and the
programs
have been very active, so we might get another travel-range day both ways.
You
should know the drill by now:Â scroll for those Slim Jims in the
afternoon
and be ready for the first-hour contra move if there is an aggressive
opening
period. In fact, you would probably be okay just trading 9:30 a.m. – 11:30
a.m.,
then go play golf/shop until a 2:00 p.m. return to your desk for the program
activity into the close. As a matter of fact, that is exactly what I am
going to
do. Don’t give back the excellent three days of trading by forcing marginal
trades today. If you have trouble recognizing it, then don’t do it.
Have a good trading day and a better
weekend.
Kevin Haggerty
Â
Â
