Did You Catch The Primary Trend Yesterday?
What Monday’s Action Tells
You
The market action was good only because they
did
not sell them. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at 1190.25, down less than a
point
and for the fourth successive day, closed on the magnet 1191 level. The
intraday
low was 1185.18, so the 1184.17 high close of the previous 13-day trading
range
once again acted as minor support. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) finished at 10,547,
-0.4%, with the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) at 2151, +0.2%, and the
(
QQQQ |
Quote |
Chart |
News |
PowerRating)
at
40.27, +0.4%.
NYSE volume was below all of last week at
1.35
billion shares, with the volume ratio 43 and breadth -477.
Technology had a positive divergence with
stocks
like
(
ORCL |
Quote |
Chart |
News |
PowerRating) +2.4%,
(
CSCO |
Quote |
Chart |
News |
PowerRating) +2.0% and
(
HWP |
Quote |
Chart |
News |
PowerRating) +1.62%. Focus list
stocks like
(
CREE |
Quote |
Chart |
News |
PowerRating), +6.6% on a trade-through entry above 39.50,
(
OSTK |
Quote |
Chart |
News |
PowerRating) +5.6%,
(
AMX |
Quote |
Chart |
News |
PowerRating), new highs out of a contracted volatility
pattern,
and
(
WBSN |
Quote |
Chart |
News |
PowerRating), +2.0% to new rally highs, all made traders happy. On
balance,
the primary sectors were nondescript yesterday.
For Active
Traders
The primary trend yesterday for the SPX and
Dow
started on the 11:10 a.m. ET lows and both were RST long entries. The
(
SPY |
Quote |
Chart |
News |
PowerRating)
ran from 118.94 to an intraday high of 119.63 (chart included).
The
(
DIA |
Quote |
Chart |
News |
PowerRating) had an RST entry above 105.23
and
traded up to 105.73, but faded to close at 105.35. For a daytrader, it is
about
catching the primary trend during the day, not about how they
finish.
The
RST is an expanding volatility strategy
that
most often gets the job done with the highest probability and best
risk/reward
ratio.
The
(
SMH |
Quote |
Chart |
News |
PowerRating) hit an intraday low of 33.91 on
the
third bar yesterday and re-crossed the 233-day EMA, which is 34, and never
looked back, trading up to 34.67 and closing at 34.45. The 200-day EMA is
33.80.
The current magnet is the 34.80 high rally close, and not yesterday’s 34.95
intraday high.
Today’s
Action
SPX minor support is 1184 – 1185, and the
1191
magnet closing zone for the past four days will be resolved today or no
later
than Wednesday. The futures are small green at 7:30 a.m., with the Dow +11,
Nasdaq +2 and S&P +1.40.
In spite of yesterday’s flat closing action,
focus stocks like
(
PCAR |
Quote |
Chart |
News |
PowerRating),
(
MERQ |
Quote |
Chart |
News |
PowerRating),
(
LEH |
Quote |
Chart |
News |
PowerRating) and
(
ROH |
Quote |
Chart |
News |
PowerRating) all have
good daily chart positions starting the day.
With the new gold ETF
(
GLD |
Quote |
Chart |
News |
PowerRating) now trading,
traders will never lack for anything to do with the contra side, often being
the
(
OIH |
Quote |
Chart |
News |
PowerRating) and GLD vs. the index proxies. For a new product, the GLD’s volume
is
good so far, but the intraday range is narrow, so that will have to improve
relative to daytraders, but is no problem for swing traders.
Have a good trading day,
Kevin Haggerty
