Early Red Futures Set Up 1st Hour Strategies
What Thursday’s Action Tells
You
The
(
SPY |
Quote |
Chart |
News |
PowerRating) opened up at 118.21, then
traded
down to a 118 intraday low on the 9:40 a.m. ET bar, then reversed the
previous
day’s 118.05 low and traded up to 118.81. The 118 low held the 20-day,
30-minute
-2.0 standard deviation band (12/08 commentary), and the initial 120-minute
chart resistance at 118.75 – 118.90 put a lid on yesterday’s rally (12/08
commentary).
The SPY did trade back down to 118.37 on the
3:15
p.m. bar, but rallied into the 118.79 close. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) held
its
20-day EMA, hitting an intraday low of 1176.82, then rallying to 1184.05
(1184.17 high close, minor resistance) in closing at 1182.81, +0.5%, as did
the
Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) to 10,494, Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), 2126, while the
(
QQQQ |
Quote |
Chart |
News |
PowerRating)
was +0.6% to 37.81.
NYSE volume repeated at 1.53 billion shares,
volume ratio neutral at 55 and breadth +647, which was positive all session
long
even when $TRIN was running at >1.40.
The
(
SMH |
Quote |
Chart |
News |
PowerRating) had its second -2.1% day in
succession on a downgrade, while the XAU ended -1.5% as the dollar rallied
along
with the
(
TLT |
Quote |
Chart |
News |
PowerRating)s, which were +1.6%. The US Dollar reflex is from just
above
the 1995 lows. The rest of the primary sectors ended green, in line with the
major indices. In conjunction with the +1.6% TLT gain, the CRB declined in
six
days from the 293 zone to a 278.81 close yesterday with the rising 200-day
SMA
at 276.59 and 200-day EMA at 274.88. The interaction of the US Dollar, CRB,
TLT
and Gold is out of sync, which hints of some major unwinding of macro
positions.
The CRB RST sell setup from that 293 zone was accompanied by a significant
negative oscillator divergence. Watch for the CRB RST buy entry above the
high
of the low day to indicate a change in direction from this sharp
decline.
For Active
Traders
Traders got into the game early yesterday
after
the SPY reversed the 118.05 previous day’s low. It went net plus above
Tuesday’s
118.10 close and yesterday’s 118.21 open. The first advance ran to 118.54,
then
declined to 118.13 before going net plus again, which is above 118.21, which
carried to 118.81.
The
(
OIH |
Quote |
Chart |
News |
PowerRating) Trap Door after an opening
five-bar
decline to a 78.90 intraday low was a no-brainer right out of the strategy
modules. Once again, it was an 89-day EMA play as the inside-bar Trap Door
entry
(five-minute chart) was above 79.09, which was a re-cross of the 89-day EMA
at
79.07. It was a daily chart setup with a first-hour Trap Door entry
confluence.
That is what it is all about, traders. The OIH ran to 81.29 and the 240 EMA
(five-minute chart) before fading to the 80.06 close. The OIH retracements
continue to provide a windfall for traders. There were many related energy
focus
stocks that obviously had the same Trap Door setup and have good daily chart
setups going into today. FYI:Â Just before you got the OIH Trap Door
entry,
the media was hyping that oil had just traded below $40. The beat goes
on.
If you trade the
(
DIA |
Quote |
Chart |
News |
PowerRating)/futures, you had
entry
on the 9:45 a.m. bar, which was a re-cross of the 20-day EMA at 104.48,
which
traded up to 105.06, closing at 105. First-hour trading strategies were the
soup
of the day.
^next^
Today’s
Action
I turned CNBC on this morning, and as always,
turned the sound off, but was happy to see the futures to the red side, with
the
S&Ps -4.10, Dow -34 and Nasdaq -11.50. The better short-term position
trades
will happen after some more downside pressure.
The better daily chart position setups for
the
SPY will occur if price trades below 117.03 and the DIA below 104.02 where
RSTs
can form. The QQQQ closed at 39.81 with today’s relevant minor support
levels at
39.35, 39 and 38.50.
The SMH is -4.2% the past two days, closing
yesterday at 33.03, so any Trap Door setups after early red would be an
initial
daytrading opportunity. 32.50 is an early level of interest. The better
daily
chart position setups would be a decline to the 31.50 – 31.75 level.
As I prepare to record this at 8:05 a.m., the
futures then slipped some more with the S&Ps -5.10, Dow -45 and
Nasdaq -13.50,
so that is a daytrader’s positive for first-hour strategies.
Have a good trading day,
Kevin Haggerty