Another Alert Zone

  • September 13, 2000
  • Kevin Haggerty

The
S&P 500 is still in the .38 RT zone, as
it hit an intraday low of 1480 yesterday, and closed at 1482 vs. a 50-day EMA of
1483. Relative to the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating), it has only lost 3.3% from its last
swingpoint high of 1530.09 vs. a  -12.1% decline for the NDX 100. 


Volatility continues with
option expiration this week, and the liquidity in the higher-priced momentum
stocks is non-existent. When the fear-valve opens, these stocks can be moved
very easily, as the professionals are not about to get caught with heavy
positions, for fear of a meltdown.


Yesterday was a repeat
performance for the NDX 100. It advanced +2.3% from Monday’s 3707 close to an
intraday high of 3792 just before noon, then accelerated down as it broke back
below its .50 RT level of 3750. The NDX immediately traded down to its .618 RT
level of 3650, hitting an intraday low of 3645, before closing at 3667.


Similar to Monday
afternoon’s drop of -4.2%, the NDX declined 3.9% from its midday high of 3792.
Early up and late down is never positive. You have convergence now for the NDX
at its .618 RT level and the 200-day EMA now 3605. 


For those of you who took
the RST sell on the close below the 4057 low of the 4147 high day, you
are now up almost 9% and this is a good spot to exit half of your positions. If
there is a meltdown, your other half will get the job done.


The institutional
allocation and program agendas during this expiration week, coupled with
negative early warnings, makes it imperative that you trade what is, not what
you think it should be. Your stops must be tight and perhaps your positions
smaller, but take the trade — don’t hesitate.














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


Fair
Value

size=2>Buy

size=2>Sell


23.30


24.60

22.05


Pattern
Setups


There aren’t many in the daily charts.
From yesterday’s commentary, I hope many of you had
(
JPM |
Quote |
Chart |
News |
PowerRating). There was a
simple continuation setup in a rumor stock that caught the big news.


Three stocks that do set up in the
daily charts are:
(
GS |
Quote |
Chart |
News |
PowerRating) (above Monday’s high),
(
LEH |
Quote |
Chart |
News |
PowerRating) and
(
COF |
Quote |
Chart |
News |
PowerRating). 


Some momentum stocks that don’t set up
on the daily charts, but had a big rush down, (take your first intraday buy
pattern if in fact they come for them today off this RT level):
(
MXIM |
Quote |
Chart |
News |
PowerRating),
(
CIEN |
Quote |
Chart |
News |
PowerRating),
(
SEBL |
Quote |
Chart |
News |
PowerRating) (which did close in
the top of its range), 
(
JNPR |
Quote |
Chart |
News |
PowerRating),
(
SUNW |
Quote |
Chart |
News |
PowerRating),
(
PMCS |
Quote |
Chart |
News |
PowerRating) and
(
NEWP |
Quote |
Chart |
News |
PowerRating).


Also, the QQQs
(
QQQ |
Quote |
Chart |
News |
PowerRating) closed at 91
1/4, and yesterday’s low of 90.84 was exactly the .618 RT level. The 200-day EMA
is 90. I’d be ready to jump on those if they start to come for them today.


Have a good trading day.


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