Energy Stocks Continue To Reward Traders
What Monday’s Action Tells
You
The market action yesterday as defined by the
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was contained within 90 minutes from 12:45 p.m. – 2:10 p.m.
ET.
>From the opening until 12:45 p.m., the SPX traded in a 3 point range between
1170.88 – 1167.89. The breakout of this range carried up to 1178.18, the
intraday high, which was also the .50 retracement to the 1188.46 rally high
from
1167.89. This completed the move as the SPX traded between 1178.18 – 1175.16
into the 1177.24 close, +0.6% on the day. This closing range, therefore,
becomes
the initial focus this morning for daytraders.
The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) was +0.3% to 10,489,
while
the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), 2085, was +0.7% and the
(
QQQ |
Quote |
Chart |
News |
PowerRating) +1.0% to
39.05.
NYSE volume was 1.39 billion shares with a volume ratio of 69 and breadth
+1241.
In fact, breadth remained positive during the 3 point trading range, while
TRIN
was negative between 1.70 – 1.45 and the up volume/down volume number was
also
negative at .60 – .70. The up volume/down volume ratio improved to better
than
2:1 during the rally. This early volume divergence indicated the stronger
selling in a smaller number of big-cap stocks during the 3 point early
range.
All of the primary sectors, except the
(
SMH |
Quote |
Chart |
News |
PowerRating), -.06%, were +0.5% to
+0.8%.
The
(
OIH |
Quote |
Chart |
News |
PowerRating) was +0.5%, but daytraders had
another bonus trading day with trade-through entries in stocks like
(
PXP |
Quote |
Chart |
News |
PowerRating),
+2.7%,
(
VLO |
Quote |
Chart |
News |
PowerRating), +2.7%,
(
XTO |
Quote |
Chart |
News |
PowerRating), +2.2%,
(
KMG |
Quote |
Chart |
News |
PowerRating), +2.0% on a breakout of
a
triple top, as did
(
XOM |
Quote |
Chart |
News |
PowerRating), +1.1%.
If you are a daytrader in individual stocks
and
have not been in the energy stocks recently, then your stock selection
methods
have to be reexamined because you are not cutting it.
Today’s
Action
Traders start today with the closing SPX
range
from 1178.18 – 1175.16 and with the market in full holiday mode, so erratic
trading takes precedence over trend. An upside breakout of this range could
run
quickly to the 1184 – 1185 level with the best downside zone being 1161 –
1163.
Initial downside minor support is the 1170 – 1171 level.
The holiday bias is long through month-end
and
the initial December trading days, but the major indices could use some more
retracement to better set the table for a mark-up into year-end. However,
markets are perverse and really don’t care or know what we prefer. The SPX
is
three days down from its 1188.46 intraday rally high, but is six days down
from
the 11/12 1184.17 closing high, which is a more significant
number.
Tomorrow is a big travel day for
Thanksgiving, so
liquidity is bare bones, as it will be on Friday. With a good year on the
books
year-to-date for the Generals and hedge funds, which direction do you think
they
will push price if they can? Correct. Then trade accordingly and buy
retracements and maybe some contracted-volatility-pattern breakouts at or
near
highs, but don’t be a Smart A – – on the short side.
Have a good trading day,
Kevin Haggerty
Â
Trade with Kevin for a
year.
Click here.