Anticipated 1st Hour Strategy In The Red Zone
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a live conference call Wednesday after the close.
Click Here.
What Yesterday’s Action Tells
You
After the gap-up opening and the contra move down
the major indices went sideways into the close. The SPX closed at 1095.34
+0.2% and closed once again within that 1% closing range that is now 11 days
old. In fact, it closed at 1095.49 on 5/11, with the 4 MA of the volume ratio at
26 on 5/10 and 31 on 5/11 with corresponding 5 RSI of 17 and 33. Yesterday’s
close of 1095.34 has the 4 MA of the volume ratio at 58 and 5 RSI at 53. Net
net, the SPX has been rolling in place with no closing price advance during this
trading range. The SPX has been acting better than most stocks and the
bigger cap stocks better than the small caps. However, in yesterday’s action,
the IWM (Russell 2000) was +1.3% and the MDY (MidCap Index) +1.1%, outperforming
the SPX, +0.2%, Dow -.08%, Nasdaq, +0.6% and the QQQ, +0.7%. The other market
action yesterday centered around energy, with OIH +4.2% and XLE +2.3%, along
with the TLTs, +0.3%, which then carried over to the utilities, with the XLU
+1.4%.
Gold continues the move from an oversold sequence
zone which we caught early, with the XAU +1.4% yesterday. This index has
advanced +10.5% in 11 trading sessions since the 5/10 low of 76.79 to
yesterday’s 87 high and close. NEM, one of
the primary focus stocks, is +12% during this period.
Breadth was better for the third day in
succession at +1475 and the 4 MA now +848. The TLTs are +0.7% for the same three
days so that certainly contributed to the improvement.
Â
| Â | Tuesday 5/18 |
Wednesday 5/19 |
Thursday 5/20 |
Friday 5/21 |
Monday 5/24 |
Index |
|||||
| SPX Â |
|||||
High |
1094.14 | 1105.93 | 1092.62 | 1099.70 | 1101.71 |
Low |
1084.10 | 1088.49 | 1085.43 | 1089.19 | 1091.77 |
Close |
1091.67 | 1088.67 | 1089.18 | 1093.59 | 1095.34 |
%Â |
+0.7 | -0.3 | +.05 | +0.4 | +0.2 |
Range |
10.0 | 17.4 | 7.2 | 10.5 | 9.9 |
% Range |
7.6 | 1 | 52 | 42 | 36 |
INDUÂ |
9969 | 9938 | 9938 | 9967 | 9958 |
%Â |
+0.6 | -0.3 | 0 | +0.3 | -.08 |
Nasdaq  |
1898 | 1898 | 1897 | 1912 | 1923 |
%Â |
+1.1 | +.02 | -.08 | +0.8 | +0.6 |
| QQQÂ |
34.73 | 34.69 | 34.85 | 35.02 | 35.26 |
%Â |
+0.9 | -0.1 | +0.5 | +0.5 | +0.7 |
NYSEÂ |
|||||
T. VOLÂ |
1.35 | 1.54 | 1.21 | 1.26 | 1.23 |
U. VOLÂ |
1.02 | 793 | 529 | 840 | 823 |
D. VOLÂ |
317 | 729 | 669 | 402 | 376 |
VRÂ |
76 | 52 | 44 | 68 | 69 |
4 MAÂ |
46 | 47 | 47 | 60 | 58 |
5 RSIÂ |
39 | 36 | 37 | 49 | 53 |
ADVÂ |
2406 | 1791 | 1938 | 2187 | 2395 |
DECÂ |
923 | 1524 | 1388 | 1086 | 920 |
A-DÂ |
+1483 | +267 | +550 | +1101 | +1475 |
4 MAÂ |
+118 | +235 | +264 | +850 | +848 |
SECTORSÂ |
|||||
SMHÂ |
+1.8 | +0.4 | -0.5 | +0.4 | +0.6 |
| BKXÂ |
+1.0 | +.03 | +0.5 | +0.8 | +0.3 |
XBDÂ |
+1.4 | +0.7 | -0.1 | -0.1 | +0.6 |
RTHÂ |
+2.0 | -0.5 | -.06 | +0.5 | +0.5 |
CYCÂ |
+1.4 | +.09 | -0.6 | +0.7 | +0.9 |
PPHÂ |
+.08 | -0.8 | -0.3 | -0.2 | -1.0 |
OIHÂ |
-1.7 | -0.2 | -0.5 | -0.7 | +4.2 |
| BBHÂ |
+0.6 | -1.3 | -0.4 | +0.5 | -0.3 |
TLTÂ |
-0.2 | -0.3 | +0.8 | -0.4 | +0.3 |
| XAUÂ |
+1.8 | +1.8 | -0.6 | +2.2 | +1.4 |
^next^
For Active Traders
The gap opening set up the first hour strategies
with sequence. The QQQ opened at 35.29, up from the previous 35.02 close and hit
35.46 on the 9:45 AM bar, the end of amateur time in that first 15 minutes. The
1.0 volatility band was 35.41 and the 1.28 band at 35.53. The previous 2 highs
the last 8 days have been 35.45 and 35.51. This contra move started at 35.46,
which was the intraday high and the QQQ traded down to the 240 EMA and and
intraday low of 35 by the 11:45 AM bar, then made another attempt up from there
to 35.29 but that was it and price went sideways into the 35.26 close.
The high close for the past 13 days is 35.26 and
yesterday was the third 35.26 close during this period. There is minor
resistance along with the 50-day and 89-day EMAs between 35.50-35.75. The SPX
had a similar trade, with the intraday high at 1101.71 vs the 1.0 volatility
band 1102.93
For Today
Yesterday’s NYSE volume had another a pre-holiday
look at 1.2 billion and with the futures red at 8:10 AM, the initial first hour
opportunity will probably be on the downside. The futures read S&P -3.20, Dow
-33 and Nasdaq -7. For the SPX on the downside, you have the current channel
line at about 1085 with the 200-day EMA at 1081.15 in addition to the sequence
zone confluence under that. If the SPX trades higher above 1105 it meets initial
resistance at 1110-1115. Right now, I expect any rally into the mid-June time
zone to be a selling opportunity in the absence of any unusual news from the war
front and that doesn’t seem likely.
Have a good trading day,
Kevin Haggerty