Again

• January 10, 2002
• Kevin Haggerty

All of
the major indices finished on the red side after
an early gap up. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at 1155.14, -0.5% and at the
bottom of the trading range price box I
discussed yesterday. The 30-week EMA is 1153 and the 10-week 1148. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) ended -0.6%, and the NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) -0.8%. Most all of the
major sectors closed red, except the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), which was neutral at
+0.1%. NYSE volume picked up some to 1.4 billion, the volume ratio was negative
at 42, and breadth was a push. 

It was a gap up sideways
and then a 3:00 program sell-off that sank the indices. If you got caught long
on the sell-off, then you better regroup because the NDX had already made a
double-top retracement back to the double-top neckline and then gave you another
out, or short, when the NDX broke below 1690. See your five-minute chart.

You can’t know when a
blow-out program is coming, but you do know when the intraday trend is down.
When the NDX made the double top, the SPX made a 1 2 3 lower top with short
entry below the 2 point, which was 1169.40. Once it broke that level, it didn’t
look back. Any shorts taken from the 1 2 3 short entry caught the windfall from
the program gang’s attack. Very often these surprise attacks come at the key
inflection points on either/or both the intraday and daily charts. That is the
key to their legging in strategy when they are playing for the extra vig by
beating a certain spread or just doing it in a proprietary account. Don’t send
me any e-mails on this because I won’t answer them.

The early gap up ended
for the SPX on the 11:05 bar at, you guessed it, the 1174.26 intraday high. From
there it was south for 22 points to 1152, then closed at 1155.

Stocks
Today

Only one stock in the NDX
100 closed in the top 25% of its range, and that was
(
SYMC |
Quote |
Chart |
News |
PowerRating), which was an
upside accident waiting to happen out of that trading range. The breakout was on
a wide-range bar with volume, so you should be ready for any follow-through.

Stocks to focus on today:
(
SYMC |
Quote |
Chart |
News |
PowerRating),
(
IPIC |
Quote |
Chart |
News |
PowerRating),
(
BRL |
Quote |
Chart |
News |
PowerRating),
(
BVF |
Quote |
Chart |
News |
PowerRating),
(
IGT |
Quote |
Chart |
News |
PowerRating),
(
PPDI |
Quote |
Chart |
News |
PowerRating),
(
BRCD |
Quote |
Chart |
News |
PowerRating),
(
IR |
Quote |
Chart |
News |
PowerRating),
(
SLB |
Quote |
Chart |
News |
PowerRating) and
(
NBR |
Quote |
Chart |
News |
PowerRating).

On the shortside:
(
QCOM |
Quote |
Chart |
News |
PowerRating),
(
HGSI |
Quote |
Chart |
News |
PowerRating),
(
CAH |
Quote |
Chart |
News |
PowerRating),
(
AMGN |
Quote |
Chart |
News |
PowerRating) and
(
MYGN |
Quote |
Chart |
News |
PowerRating).

As you can see on the SPX
hourly chart, the SPX can’t get going again unless it can trade above the
1158-1160 level, and you have the 30-week 1153-1150 zone below, which if broken,
will solicit some selling.

Have a good trading day.

Five-minute chart of
Wednesday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Wednesday’s NYSE TICKS