Here Are The Two Levels You Need For Today
What Thursday’s Action Tells
You
The market action yesterday was a
continuation of
the positive divergence in technology after the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) finished
-1.2% last week and the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s +0.1%.
The
(
SMH |
Quote |
Chart |
News |
PowerRating) joined the parade this week and
after four straight up days is +7.0%. It certainly looks like some of the
October-fiscal-year-ending funds have an agenda. “If they can, they
will.”
Yesterday was blatant, as the QQQ closed at
36.60, +1.5%, and the SMH +2.8%, while the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) ended the day
at
9866, -0.2%, and the SPX 1106.49, +2.8 points or just +0.3%.
The brokers (XBD) had a rush yesterday at
+2.3%,
while the
(
OIH |
Quote |
Chart |
News |
PowerRating) was +1.3%, and you had continuation trades in those
stocks
from the 10/18 commentary. The OIH is now +5.0% in the past two
days.
NYSE volume remained strong at 1.67 billion
shares, with a volume ratio of 65 and the 4 MA neutral at 50. Breadth was
+1178
with the 4 MA nowhere at a neutral +191.
The SPX hit an 1108.96 intraday high
yesterday
and is +1.3% off the key price zone low of 1094.25 and has been just a
reflex so
far without significant participation across many sectors, other than
technology, and specifically, the semis.
The QQQ made a 35.20 low on 10/12, then
tested it
on 10/15 (last Friday) and is +4.3% low-to-high (36.79) into yesterday. This
divergence is vs. the SPX making its 1094.25 low on Wednesday. This QQQ
rally
has price approaching its down trendline from the 01/20/04 39 high, which is
about the 37 – 37.50 level. The QQQ has rallied +13.7% from a major
retracement
zone after the 08/13 32.35 low. It has had two retracement on this rally to
34.23 and 35.20, so if you missed all three chances, don’t chase fool’s gold
and
make a purchase at these levels.
Daytraders had a good day yesterday with
retracement setups in both the QQQs and the SPX when it hit 1098.47 just
below
the .618 retracement level. The SPX rallied +10.5 points to the 1108.96
intraday
high. Those of you who have the
sequence module or
seminar material knew it
was
also an RST buy setup at the retracement zone. Just another day at the
office
with a defined strategy and sequence on a retracement in a primary price
zone.
(Enough said.)
Today’s
Action
Any SPX rally runs into minor resistance at
1113
– 1115, and then the 200-day SMA at 1120. I don’t think you need more than
those
levels for today. The downside price zone is 1100 – 1093 and after that,
retracements to 1060.72 come into play.
If the major indices go green, the QQQ must
take
out the 10/06 36.69 high again to make a run at the 37 – 37.50 down
trendline.
The trailing position stop is moved to just below 36.
Have a good trading day,
Kevin Haggerty
Spend the next year trading with me.Â
Click here for details.
