How I Traded The SMH Today
I personally like to see a
real penetration of technical supports, as this usually gives a cleaner entry as
the last holders throw in the proverbial towel.
But, regardless of what I want, I look to take what the market ultimately
offers.
With the first alert of the day in the premarket,
all that I could do was advise traders of what looked to be a key zone to
possibly trade from…..
09:23:34
Ahead Of The Curve
The semiconductor sector, represented by the cash
index (SOX.X) and the HOLDR (SMH)
look to open down into a band of support. For the SOX, daily supports are
between 463.38 – 472.60, and for the SMH, between 38 – 38.80 for supports, and
potential reversal plays.
The zone was touched on the opening bar…barely,
and as such I wasn’t totally convinced that we had seen the worst yet–so, with
an intraday consolidation pattern taking shape, a second alert was put up–one
that reflected my willingness to accept price, and not ego.
09:49:19
Intraday Setup Alert
The semiconductor HOLDRs (SMH)
are demonstrating early relative strength as session lows just touched the top
of a daily support zone ( 38 – 38.80). This action has the sector proxy
setting up in an intraday consolidation pattern, and one that might be used to
trade from, on a price break from either side. The SMH is down .10 at 38.93.
After the initial trigger on the 5-minute, and a definite show of support for
the oversold semiconductors–more patterns started to emerge, signaling
potential long reversal trades.
10:55:51
Extended Intraday Setup Alert
The semiconductor HOLDRs (SMH)
have held zone supports thus far with the proxy up .12 at 39.15. On the
60-minute extended chart, the action is shaping up as a
1,2,3 lower low reversal pattern–with the potential 3 point low being an
engulfing bar on heavy volume. Swing type triggers for those traders looking to
initiate reversal longs beyond the intraday scalp might be considered on a
confirmed move thru pattern 3 point highs of 39.49.
…and then, on the 5-minute time frame, a very sturdy and reliable pattern
appeared.
11:25:48
Intraday Setup Alert
The semiconductor HOLDRs (SMH)
has formed a higher low version of the
1,2,3, with a Kings & Queens 3 point low. The SMH is up .05 at 39.08.
It’s never easy to pull the trigger in my book.
It’s also a fact that even on your own favorite set ups there will be the trades
that just don’t work out. But, one thing’s for sure–if you’re not willing to do
the work, you’ll never appreciate the ones that do.
Chris Tyler