1st Hour Strategy Reality
The last four SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closes this
past week sum up the action: 1095.49, 1097.26, 1096.47 and 1094.66. On the
week,
the SPX was -0.2%. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) ended at 10,013, -0.8%, the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) 1904, -0.9%, and the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s 34.75, -0.7%. The 4 MA of
the
volume ratio was 56 and breadth +599. The five-day RSI for the week was
never
above 36, so there was certainly no enthusiasm there.
As I do this at 6:15 a.m. ET today, it looks
like
we are concerned about the opening downside. The Dow futures are -124,
S&Ps -14
and Nasdaq -25, all on news of an assassination of an Iraq Governing Council
honcho, but I expect the red ink to get smaller by the 9:30 a.m. opening.
Traders will make money today on the contra move after the discount opening,
so
that is the immediate market action we are concerned with, and last week and
Friday are history with no immediate meaning.
I will outline the immediate levels so you
have a
framework this morning if they really pull the plug in the opening period.
Starting with the
(
DIA |
Quote |
Chart |
News |
PowerRating), which closed at 100.45, you have the 200-day
EMA at
100.22, which will get taken out on the opening if the red ink holds. There
is
an AB=CD leg at 98.15, and the three-month 2.0 standard deviation zone is
around
97.80. There is minor range support at the 99.25 – 99.30 level which was
broken
on an intraday basis last week at 98.81, but closed at 101 that
day.
For the
(
SPY |
Quote |
Chart |
News |
PowerRating) which closed Friday at
110.04,
you have the initial level at 108.50, which is the 200-day EMA and also the
three-month 1.0 standard deviation zone. The next price action zone is 107 –
107.50. The SPX confluence zone I have previously outlined in prior
commentary
is 1065 – 1080.
The QQQ closed at the 200-day EMA, which is
now
34.74, with the previous key low at 34. If that low is taken out, the 33.50
level is a magnet, followed by 32.50 – 32.75.
A 7:15 a.m. recap on the red futures has the
Dow
-101, SPX -12.30 and Nasdaq -19.
^next^
| Â | Monday
5/10 |
Tuesday
5/11 |
Wednesday
5/12 |
Thursday
5/13 |
Friday
5/14 |
Net |
Index |
||||||
| SPX Â |
||||||
High |
1098.70 | 1095.69 | 1097.55 | 1102.77 | 1102.37 | 1102.77 |
Low |
1079.63 | 1087.12 | 1076.32 | 1091.76 | 1088.24 | 1079.63 |
Close |
1087.12 | 1095.49 | 1097.26 | 1096.47 | 1095.66 | 1095.66 |
%Â |
-1.1 | +0.8 | +0.2 | -.07 | -.07 | -0.2 |
Range |
19.1 | 8.6 | 21.2 | 11.0 | 14.1 | 23.1 |
% Range |
39 | 97 | 95 | 43 | 53 | 69 |
INDUÂ |
9990 | 10019 | 10045 | 10012 | 10013 | |
%Â |
-1.3 | +0.3 | +0.3 | -0.3 | +.02 | -0.8 |
Nasdaq  |
1896 | 1931 | 1926 | 1926 | 1904 | |
%Â |
-1.1 | +1.8 | -0.3 | 0 | -1.3 | -0.9 |
| QQQÂ |
34.67 | 35.19 | 35.26 | 35.01 | 34.75 | |
%Â |
-0.9 | +1.5 | +0.2 | -0.7 | -0.8 | -0.7 |
NYSEÂ |
||||||
T. VOLÂ |
1.91 | 1.53 | 1.70 | 1.41 | 1.34 | 1.58 |
U. VOLÂ |
276 | 1.19 | 851 | 658 | 624 | 720 |
D. VOLÂ |
1.62 | 318 | 807 | 739 | 695 | 836 |
VRÂ |
15 | 79 | 51 | 47 | 47 | |
4 MAÂ |
26 | 31 | 39 | 48 | 56 | |
5 RSIÂ |
17 | 33 | 36 | 35 | 34 | |
ADVÂ |
353 | 2703 | 1732 | 1559 | 1874 | 1644 |
DECÂ |
3099 | 682 | 1589 | 1761 | 1440 | 1714 |
A-DÂ |
-2746 | +2021 | +143 | -202 | +434 | -350 |
4 MAÂ |
-1941 | -1434 | -877 | -196 | +599 | |
SECTORSÂ |
||||||
SMHÂ |
+1.0 | +2.7 | -1.3 | -1.1 | -1.3 | -0.2 |
| BKXÂ |
-1.6 | +0.4 | +1.3 | +0.1 | +.09 | +0.3 |
XBDÂ |
-0.5 | +2.3 | +0.5 | -0.3 | -0.9 | +1.1 |
RTHÂ |
+1.0 | 0 | +0.4 | -0.5 | -.07 | +0.8 |
CYCÂ |
-1.7 | +1.5 | +0.1 | +0.6 | -0.2 | +0.3 |
PPHÂ |
-1.5 | 0 | +0.2 | -0.6 | +0.5 | -1.4 |
OIHÂ |
-2.9 | +1.2 | +0.4 | +0.9 | +0.2 | -0.2 |
| BBHÂ |
-1.4 | +1.7 | +1.2 | +0.2 | -0.5 | +1.2 |
TLTÂ |
-0.2 | +0.5 | -0.7 | -0.4 | +0.8 | 0 |
| XAUÂ |
+2.4 | +1.9 | -1.0 | -0.8 | +1.4 | +3.9 |
The Market Makers and Specialists have sweaty
palms anticipating the fleecing of the lambs this morning due to the
exaggerated
futures action. They are rooting as much as the daytraders for the red to
hold,
unless of course, they came in today with some significant long positions.
The
geopolitical news remains negative on a daily basis, and the media blitz to
get
a Democrat in office is relentless, so everything is magnified and the good
ignored. This means there will be some excellent volatility for traders and
that
always translates into the first-hour strategies and sequence
zones.
Before I record this now at 7:30 a.m., the
last
recap of the futures shows the Dow -97, S&P -11 and Nasdaq -18, so the
red ink
continues to narrow, but there will still be plenty of room for traders
after
the open. Make sure you are aware of today’s volatility band levels, in
addition
to the levels I have outlined.
Air pockets on announced news almost always
result in good contra trades. Friday is an example of that as the QQQ opened
at
35.21 from a previous close of 35. It hit 35.31 on the second bar, then it
was a
knife down to 34.65 on the 10:15 a.m. bar. This set up the Trap Door with
sequence above 34.76, which was also a re-cross of the 200-day EMA. Next you
had
the 1,2,3 lower bottom with entry above 34.80 which traded to
35.26.
“The game goes on but remains the
same.”
LEARN IT.
Have a good trading day,
Kevin Haggerty