Liquidity Getting Thin, But Here’s An Idea…
What Tuesday’s Action Tells
You
The market action was certainly erratic, but
not
a surprise in this holiday liquidity as price can be pushed around with
little
effort. I have included the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) five-minute chart which
highlights the different moves above and below the previous day’s closing
range
of 1178.18 – 1175.16. Price did bounce off the minor support level (11/22
commentary) after hitting the 1171.41 intraday low and trading up to
1179.45.
This choppy action left the SPX at 1176.94,
minus
less than a point, with the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) at 10,493, +4 points. The
Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) lost a point to 2084, with the
(
QQQ |
Quote |
Chart |
News |
PowerRating) at 39.
NYSE volume was more than expected to 1.43
billion shares with the volume ratio neutral at 50 and breadth
+720.
Individual stock opportunities were much more
profitable for daytraders yesterday than the major indices. Once again, the
energy stocks were a profit center for traders. Eight of the last eleven
days
have provided defined continuation entries with profits from entry to highs
all
above +2.0%. The
(
OIH |
Quote |
Chart |
News |
PowerRating) only finished the day +1.1%, but at one point was
+2.3% from entry to the 86.87 intraday high after an 84.88 entry level.
This, of
course, meant that there were similar entries in many of the energy focus
list
stocks. Other focus stocks, like
(
ADBE |
Quote |
Chart |
News |
PowerRating) and
(
SYMC |
Quote |
Chart |
News |
PowerRating) also had good
trade-through entries and gains.
Today is a “leave early day” for many, so
liquidity gets even thinner, and I would expect some funny SPX moves similar to
the sell program yesterday on the 10:50 a.m. ET bar which took the SPX down
to
1171.41 and the buy program on the 2:00 p.m. bar that carried price to a
double
top at 1179.45 and a closing range of 1179.45 – 1174.83 with an actual
1176.94
close.
The SPX 1184 – 1185 level remains the initial
minor resistance and 1171 is the initial minor support.
On days with reduced liquidity like today and
Friday, narrow-range Slim Jims are fertile ground for trade opportunities in
uptrending stocks that the Generals and hedge funds have incentives to
mark-up
into month-end.
The next commentary will be next Monday, so
all
of you have a happy and safe Thanksgiving.
Have a good trading day,
Kevin Haggerty
