Awareness Zone
New
York Stock Exchange volume dropped
to a holiday 1.1 billion and the
major indices dropped for the third day in succession. Both the S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
and Dow
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) declined 2.1%, while the Nasdaq
(
$COMPQ.X |
Quote |
Chart |
News |
PowerRating) lost 3% and the Nasdaq
100
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) was -3.6%, as all the low-priced dogs dropped again, as
expected. The volume ratio was just 13 and breadth -1370. The SPX hit an
intraday low of 874.63, closing at 876.19 in the bottom of the range, as it has
the previous two days. The major indices are doing what the are supposed to do
after a +20% move in 20 days, which is totally unsustainable.
The SMHs
(
SMH |
Quote |
Chart |
News |
PowerRating)
declined 5.7%, hitting an intraday low of 22.90, closing at 23. After the 57%
gain in just 18 days, which is simply astounding in this market, the SMHs have
retraced 16% on a high/low basis. 23.41 is the .38 retracement; 22.25 the .50
retracement, and 21.09 the .618 retracement. They are now in the awareness zone
from here down, so they get my primary focus and why not, after that 18-day
performance?
The past three days have
left the major indices short-term overbought as the three day volatility ratio
is now an oversold 19; the three-day advance/decline numbers average -976 and
the NYSE’s volume had a three-day average of just 1.3 billion, which is below
its daily range. 850-870 on the SPX has a confluence of different numbers, so
any early weakness today will probably provide you with some decent trade
setups.
The futures have just
turned green as I do this, but as we know, that can change quickly depending on
who is controlling the game this morning.
Have a good trading day.
Five-minute chart of
Monday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Monday’s NYSE TICKS