Energy stocks the primary focus
Kevin Haggerty is a full-time
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The S&P Futures were +4 points pre-9:30 AM yesterday,
and that is how the SPX traded into the 1399.72 close (+3.1 points). The
narrow range all day meant the “casino” was essentially shut down for daytraders
in the indexes. This often happens the last couple of days prior to an
option expiration. However, there was no narrow range in the energy
sector, as the CL06 (December crude future) was -4.2% to a new closing low of
56.26. There was nothing resembling an intra-day reversal as the OIH
(-3.6%) and XLE (-2.8%) were also spikes down. A couple of late-day
reversal attempts were stopped out. Gold declined in the same way, with
the $HUI finishing at 317.33 (-4%). The decline in crude oil makes the
energy stocks today’s primary reversal focus, just like we (Trading Service) did
with the defense, drug and health care stocks, which were sold off into the
elections. The internals were decent all day, as the up volume/down volume
ratio was running about 1.6 to 1, and TRIN was < 80. However, breadth was
weak (+234) relative to the index gains. But this was partially skewed by
the TLT, which finished -0.5%.
NYSE volume was 1.68 billion shares with the volume ratio 61
and the 4 MA’s of the volume ratio and breadth short-term overbought at 66 and
+726. The previous day, it was 63 and +924. The SPX is up 5 straight
days in 8 of the last 9. So most of the ATL (Above The Line) stocks we
focus on in the Trading Service are extended in price/up-days, the same as the
SPX. This leaves fewer higher-probability situations for daytraders.
The volatility is in the energy and certain other commodity stocks, like NUE,
FCX and PD, so that is this corner’s key focus today, in addition to the SPX on
the short side, the trades to the 1403-1407 zone.
Have a good trading day and a better weekend,
Kevin Haggerty
Check out Kevin’s
strategies and more in the
1st Hour Reversals Module,
Sequence Trading Module,
Trading With The Generals 2004 and the
1-2-3 Trading Module.