Daytraders, Here’s Where To Start Your Day
The casino went strange
on us Friday as the SPX traded in a three-point range from 1175.75 –
1172.75 until just before 11 AM. The futures lit up the board and the ESH5
traded from 1173 to 1166.25 in just four bars, which was the intraday low on the
11:20 AM bar. After an RST entry above 1168, the SPX went sideways between 1170
– 1166.50 until our futures friends took them up from 1170 starting on the 3:40
PM bar to 1175.25, closing at 1175, versus 1174.75 on Thursday. The SPX was
-0.3% to 1171.36.
As long as the regulators let program traders use
one market to influence the related underlying market, the intraday travel range
game will continue.
The Dow was -0.4% to 10,427 with Proctor & Gamble
(
PG |
Quote |
Chart |
News |
PowerRating), -2.1%, announcing a deal to take out one of our
Focus List stocks, Gillette
(
G |
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News |
PowerRating), which was +12.9%. Merck
(
MRK |
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News |
PowerRating) was the
big drag on the Dow at -10.1% on news. The Nasdaq finished at 2034, -0.5% as did
the QQQQ, -0.5%, to 36.92.
I see that the GDP increase was +4.4% for
2004–the best since 1999–but that might be a bit confusing to some that had
listened to the Democrats’ economic spin prior to the election, which had the
economy going to the depths of Depression (etc, etc, etc).
The sectors were nondescript except for the OIH,
-2.1%, after having advanced 11 of 13 days and also reacting to crude, -3.4%, on
Friday. The TLT (bond proxy) was +1%, with the long bond yield now down to
4.61%. The TLT advance puts some related homebuilders up, with Beazer
(
BZH |
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PowerRating)
+3%, KB Homes
(
KBH |
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PowerRating), +1.8% and Ryland
(
RYL |
Quote |
Chart |
News |
PowerRating), +1.2%.
Unless you caught that lunchtime futures knife
down into the 1166.25 ESH5 intraday low, there wasn’t much after that. The same
trade in the QQQQ was below 37.04 to 36.62. That lower zone was played long into
the close at 36.92.
The volume and breadth ratios Friday didn’t tell
us anything real positive during the day. The volume ratio was 40 and breadth
-209. NYSE volume was 1.64 billion shares and averaged 1.6 billion shares on the
week.
The SPY closed at 117.43, ranging between the
50-20 day EMAs at 117.95 – 118.07 and the 15-week and 89-day EMAs from 117.22 –
116.72, so that is where daytraders start the day.
There is initial retracement confluence from
115.70 – 115.30 (see today’s SPY chart).
This commentary is being done Sunday for Monday,
so we know not what the futures bring after the Iraq election, but those of you
familiar with the
first-hour strategies and
volatility bands are well-prepared for any extended volatility today.
Have a good trading day.
Kevin Haggerty
