Keep Pre-Holiday Positions Light

  • August 31, 2000
  • Kevin Haggerty

Both the
S&P 500 and Dow had three-bar reversals on
the daily chart yesterday, and closed below the low of the high day. The Nasdaq
100
(
NDX |
Quote |
Chart |
News |
PowerRating) was up +0.5%, led by the dotcoms as the analysts start the hype.
They just keep rotating to each sector that’s down and start this positive spin
to keep their underwriting commissions coming in the door. There are not too
many significant investment banking clients without strong buy or buy ratings.


The NDX might trade above
the July 4089 minor high before correcting. The delaying factor for a pullback
might be the first few days in September as new monies hopefully get put to
work. 


Once again, as expected,
there was moderate volume at 819 million and reduced liquidity which can lead to
opportunities for daytraders. It
will also chop up position traders as the market tests or blows out their stops
in a flash. 


Trust me. Get your option
education sooner rather than later. You will be rewarded in your position
trading if you are serious about this business.


The breadth was, once
again, slightly negative as was the volume ratio at 47. When
you are in pre-holiday mode as a daytrader, the scrolling of the intraday charts
is where it’s at. 


You list the stocks that
set up on the daily charts and then look for intraday patterns. 


Very often, you will get an
earlier entry than a move above the previous daily high because of the reduced
liquidity.


It is also prudent
pre-holiday to reduce position size and keep tight stops.














face=”arial, helvetica”>(September Futures)


Fair
Value

size=2>Buy

size=2>Sell


4.15


5.25

3.05


Pattern
Setups


Siebel
(
SEBL |
Quote |
Chart |
News |
PowerRating), MedImmune
(
MEDI |
Quote |
Chart |
News |
PowerRating), Nextel Communications
(
NXTL |
Quote |
Chart |
News |
PowerRating),  Pe Corp.
(
CRA |
Quote |
Chart |
News |
PowerRating), EMC
(
EMC |
Quote |
Chart |
News |
PowerRating), Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating), Sun Micro
(
SUNW |
Quote |
Chart |
News |
PowerRating), Millennium Pharmaceuticals
(
MLNM |
Quote |
Chart |
News |
PowerRating), and Abgenix
(
ABGX |
Quote |
Chart |
News |
PowerRating).


Also Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating),
Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating), Maxim Integrated Products
(
MXIM |
Quote |
Chart |
News |
PowerRating), Northern Trust
(
NTRS |
Quote |
Chart |
News |
PowerRating), American International Group
(
AIG |
Quote |
Chart |
News |
PowerRating) and Morgan Stanley
(
MWD |
Quote |
Chart |
News |
PowerRating)


Yesterday we had TMCS in there instead
of
(
PMCS |
Quote |
Chart |
News |
PowerRating) — just a typo. Sorry about that.


Have a good trading day and keep your
positions light and don’t be afraid to keep very tight stops. You can always get
back in.


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