Stay On Top Of Intraday Dynamics

Yesterday didn’t have much more volume than last Friday, with the techs down big (NDX -64) and the bonds getting crushed. The S&P 500 barely held its recent lows.

After 1:00 PM ET, some of the cyclicals popped to new intraday highs and made good runs, but not on particularly high volume. Names like Caterpillar (CAT) and Dupont (DD) have already corrected 10 to 20% and haven’t done a thing in 10 to 13 days. The institutions were all on the same side yesterday, and there certainly wasn’t much for sale.

Key point: with techs and energies selling off, our list gave us nothing–a chance to get in on some names, but with quick stop-outs. If you were following the markets dynamics, you might have noticed that some of the cyclicals were acting well in the down tape; scrolling through your five-minute charts might have alerted you to some of the consolidations at intraday highs (“Slim Jims“) that ended up breaking out for good moves. Intraday trading is dynamic, not static.

Target Stocks Of The Day Nothing is trending right now, with stocks getting thrown around like beach balls with each bit of news. Fear is stronger than greed, but we all know how fragile that is. Nothing will happen until the S&P gets out of its four-day, 2% range of 1305-1277. You can play the breakout either way.

Stocks that set up yesterday (there weren’t many) include Best Buy [BBY>BBY], on a re-cross of its 50-day moving average, Allied Signal [ALD>ALD], Circuit City [CC>CC], Alltel [AT>AT], FDX Corp. [FDX>FDX], Sprint [FON>FON], and Avon [AVP>AVP]. Two cyclicals that didn’t get too far ahead of themselves yesterday and look promising are Union Carbide [UK>UK] and International Paper [IP>IP].

Program trading numbers Buy: 4.50. Sell: 1.10. Fair Value: 2.60.

Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his new series of tutorial articles.