Be Light And Fast
A down
day for the Dow at -0.6% and
the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) at -0.8%, but the NDX 100
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) finished green
at +0.6%. Volume on the NYSE was very light at 976 million, a volume ratio of
37, and negative breadth at -722. The star of the day was the semiconductor
sector, with the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) closing +5% on the day. It appears the buying
pressure we saw last week was significant. The Generals seem to like the level,
regardless of what’s going on abroad and now, unfortunately, at home in Florida.
Not good.
The SOX stood out at
+11.3 points at 3:30 p.m. yesterday afternoon, while the rest of the dynamics
were negative. The SPX was -14, NDX -6, and Dow -89 as the SOX was +11. The
up/down volume ratio was just .48, breadth negative at -809, with TRIN at +1.20.
This positive divergence of the semis keeps them front and center for today’s
trading plan. On the daily chart, they have broken out of a 10-day range above
32.45, as evidenced by the
(
SMH |
Quote |
Chart |
News |
PowerRating)s. That was last Thursday, and then they
closed yesterday at 33.98. The eight-period moving average of the high is 31.46,
so use that as an early stop on any long positions. The .38 retracement to the
Aug. 27 high of 47.68 is 35.09; the .50 is 37.50; and the .618 is 39.90. Some
stocks like
(
QLGC |
Quote |
Chart |
News |
PowerRating) and
(
NVDA |
Quote |
Chart |
News |
PowerRating) are very extended over the short
term.Â
The SPX will head south
for a retracement if it trades below 1053.50 and then below its eight-period
moving average of the low, which is 1045.24, which starts today. Both the NDX
and Dow are trading above their rising eight-period moving averages of both high
and low, but have yet to retrace anything to the 9/21 low. They will certainly
do that in very short order.
On the intraday charts,
the
(
DIA |
Quote |
Chart |
News |
PowerRating)s are vulnerable below 90.50, and then again below 90.35. They
closed at 90.70. The
(
QQQ |
Quote |
Chart |
News |
PowerRating)s get going below 31.44, and the
(
SPY |
Quote |
Chart |
News |
PowerRating)s below
105.93, and they closed at 106.53. These are potential intraday short levels for
today based on yesterday’s closing-range patterns on the 15-minute charts. They
also are all below their eight-period moving averages of high and low. The SMHs
are vulnerable for a retracement to Thursday’s 27.61 low if they trade below
33.22, which would take them to at least 31.75 and a short-term max probably to
30.75 in any hard sell-off.
Be light and fast on your
longs today. Take intraday shorts when you get them. How good can any news be,
but we know how it can get worse in a heartbeat, especially with the Florida
cases. Everyone is certainly on edge, and stocks are not the retail investor’s
prime concern right now. I think there is now, and will be, some divine market
intervention by the Fed’s team of futures buyers, and this probably has the full
blessing of the government, which must avoid any market panics during this
period. Even with this attempted cushion, the institutions can push the envelope
on the downside with any selling, and there would be considerable air pockets
before they came in to prop up the market. That said, I would prefer to make a
mistake on the short side with close stops because the downside reward/risk is
good, even if it’s just a retracement to the Sept. 21 lows.Â
Stocks
Today
In the semis, which had
declining volume yesterday with prices rising after some substantial percentage
up-moves spells caution to me. It’s a red flag. Intraday setups both ways in the
semis. Take a look at
(
NSM |
Quote |
Chart |
News |
PowerRating),
(
KLAC |
Quote |
Chart |
News |
PowerRating),
(
NVDA |
Quote |
Chart |
News |
PowerRating),
(
ADI |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
ELNT |
Quote |
Chart |
News |
PowerRating) and
(
QLGC |
Quote |
Chart |
News |
PowerRating).
Other good two-way setups
from the intraday charts are
(
VRTS |
Quote |
Chart |
News |
PowerRating),
(
BRCD |
Quote |
Chart |
News |
PowerRating),
(
VRSN |
Quote |
Chart |
News |
PowerRating) and
(
CSCO |
Quote |
Chart |
News |
PowerRating), which has been very good to us.Â
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
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