Be Ready To Board This Train
You can hear Kevin Haggerty
explain Sequence Trading in an exclusive TradingMarkets interview. Click
here to listen.
What Wednesday’s Action Tells
You
Price was up yesterday, but not the
enthusiasm,
as the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at 1143.67, +0.4%. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
ended
at 10,601, +0.3%, the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) 2023, +0.9%, and the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s
closed at 36.59, +0.6%. Certainly, the green prices didn’t attract any
aggressive volume, with NYSE volume at 1.35 billion vs. 1.52 billion on the
down
Tuesday. The volume ratio was positive at 71, and breadth also at
+1103.
The semis led the primary sectors, with the
(
SMH |
Quote |
Chart |
News |
PowerRating) at +1.8%, but volume declined to 14.3 million vs. 16.3 million on
the
Tuesday +0.5% day.
(
INTC |
Quote |
Chart |
News |
PowerRating) closed at 29.64, +1.5%, and is about +3.6%
from
that 28.50 – 29 zone after Monday’s 28.73 low just above the 40-week EMA.
The
volume in the index proxies was also below average, as it was in many of the
big-cap stocks that had decent price advances yesterday. There were a few
exceptions. There were no obvious group sector threads yesterday relative to
price and volume, but this five-day retracement has left some in position
for
traders.
For Active
Traders
It was up to 115.03 for the
(
SPY |
Quote |
Chart |
News |
PowerRating) on the
11:10 a.m. ET bar, setting up the RST sell pattern with entry below 114.87.
Coming off five days down and a short-term oversold condition, if you take
this
daytrade, your stop has to be very tight. This is also true because the
equivalent for the SPX to the 114.87 SPY was below 1143.77, but you have to
remember that the 20-day EMA was just below at 1141.60. You would only take
it
if you really didn’t think the day had a chance to be green, or if it was a
re-cross of the 20-day EMA again to the downside. For E-mini traders, entry
was
below 1143, which carried down to 1137.50. This was to the .618 retracement
zone
of 1137.95 to Tuesday’s 1133.25 low. By taking out the 1138.25 low, it set
up
and RST buy with entry above 1139.50, which carried up to 1145. As always,
in
spite of lots of daily news, the SPX continues to trade with excellent
symmetry.
| Thursday 2/19 |
Friday 2/20 |
Monday 2/23 |
Tuesday 2/24 |
Wednesday 2/25 |
|
Index |
|||||
SPX |
|||||
High |
1158.57 | 1149.81 | 1146.69 | 1144.54 | 1145.24 |
Low |
1146.83 | 1139.00 | 1136.98 | 1134.43 | 1138.71 |
Close |
1147.06 | 1144.10 | 1140.99 | 1139.10 | 1143.67 |
% |
-0.4 | -0.3 | -0.3 | -0.2 | +0.4 |
Range |
11.7 | 10.8 | 9.7 | 10.1 | 6.5 |
% Range |
2 | 47 | 41 | 46 | 76 |
INDU |
10665 | 10619 | 10610 | 10566 | 10601 |
% |
-.07 | -0.4 | -.09 | -0.4 | +0.3 |
Nasdaq |
2046 | 2038 | 2008 | 2005 | 2023 |
% |
-1.5 | -0.4 | -1.5 | -0.1 | +0.9 |
QQQ |
36.98 | 36.87 | 36.45 | 36.36 | 36.59 |
% |
-1.5 | -0.3 | -1.1 | -0.2 | +0.6 |
NYSE |
|||||
T. VOL |
1.52 | 1.47 | 1.38 | 1.52 | 1.35 |
U. VOL |
557 | 387 | 431 | 624 | 947 |
D. VOL |
919 | 1.05 | 937 | 875 | 381 |
VR |
38 | 27 | 31 | 42 | 71 |
4 MA |
45 | 44 | 32 | 34 | 43 |
5 RSI |
49 | 44 | 39 | 36 | 49 |
ADV |
1214 | 1168 | 1188 | 1654 | 2187 |
DEC |
2071 | 2117 | 2099 | 1650 | 1084 |
A-D |
-857 | -949 | -911 | +4 | +1103 |
4 MA |
-209 | -250 | -858 | -678 | -188 |
SECTORS |
|||||
SMH |
-1.9 | -0.8 | -2.8 | +0.5 | +1.8 |
BKX |
+.06 | -0.4 | +0.2 | -0.1 | +0.5 |
XBD |
-1.3 | -0.6 | -1.4 | -1.2 | +1.7 |
RTH |
+0.4 | +1.1 | -0.5 | -0.1 | +0.9 |
CYC |
+0.1 | -0.7 | -0.8 | -0.3 | +0.7 |
PPH |
+0.4 | -0.3 | -0.5 | +0.5 | -0.2 |
OIH |
-.08 | -.03 | -0.5 | +1.5 | +0.3 |
BBH |
-0.4 | -0.1 | -0.9 | -0.3 | +0.9 |
TLT |
+.01 | -0.8 | +0.5 | +0.2 | +0.9 |
XAU |
-0.2 | -2.7 | -1.0 | +3.0 | -1.1 |
^next^
Today’s
Action
The SPX closed at 1143.67, so the 1141.60 20-day
EMA
is our early pivot that could be probed both ways in order to catch a trade.
On
the E-mini five-minute chart, the trend remains up, provided the E-mini
holds
above the 240 EMA of 1141.62, so that is an early pivot. The high close of
the
two-day ascending triangle for the E-mini is 1144.50 and the high is 1145,
so
that is the initial resistance. The 20-day EMA is 1140.89, so relate that to
the
240 EMA of 1141.62, and don’t take an early short on a dip below 1141.62.
It’s
better if its below 1140.89.
The QQQs closed at 36.59, so the downside
parameters from yesterday’s commentary remain the same. Because of the
short-term oversold condition with the five-day RSI coming off an 18.10
number
on the 02/05 bottom of 36.33 and has since made a lower low with the
five-day
RSI now at 26.15, so you have a positive divergence there. Just go back and
overlay the five-day RSI on the daily chart for the QQQs and see the highest
probability right here is on the long side because entry is so close to the
initial stop. The QQQs can accelerate above the current three-day trading
range
high close of 36.64. If that happens, initial resistance is about 37.75, the
upper parallel line from the 39 top. I would prefer to see a move below 36
first, but markets don’t listen to schleps like us.
If the market goes green today, the brokers
as a
group have all retraced to their rising 20-day EMAs, so you have to be ready
to
board that train intraday if the game is on. The five on your screen should
be
(
GS |
Quote |
Chart |
News |
PowerRating),
(
MWD |
Quote |
Chart |
News |
PowerRating),
(
MER |
Quote |
Chart |
News |
PowerRating),
(
LEH |
Quote |
Chart |
News |
PowerRating) and
(
BSC |
Quote |
Chart |
News |
PowerRating), which had a +2.3%
pop
yesterday on 64% more than its average volume, so a second entry or
retracement
today is the best choice.
A couple of semis sitting at their 200-day
EMAs
are
(
KLAC |
Quote |
Chart |
News |
PowerRating) and
(
MCHP |
Quote |
Chart |
News |
PowerRating). KLAC closed at 53.98, with the initial
resistance being the 240 EMA on your five-minute chart at 54.12 and the
200-day
EMA just below at 53.48. It is a zone where some Generals and hedge funds
will
make some decisions, and that is why it’s a zone of opportunity for
short-term
traders.
If the energies get going today, look at
(
UCL |
Quote |
Chart |
News |
PowerRating),
(
MUR |
Quote |
Chart |
News |
PowerRating),
(
RIG |
Quote |
Chart |
News |
PowerRating),
(
NBR |
Quote |
Chart |
News |
PowerRating),
(
SLB |
Quote |
Chart |
News |
PowerRating),
(
DO |
Quote |
Chart |
News |
PowerRating) and
(
BHI |
Quote |
Chart |
News |
PowerRating),
and of course, the
(
OIH |
Quote |
Chart |
News |
PowerRating)s if you trade those. These stocks have formed
narrow ranges at their highs, so if any Generals show up on the buy side
today,
the hedge funds will front them for sure.
Have a good trading day,
Kevin Haggerty
You can hear Kevin Haggerty
explain Sequence Trading in an exclusive TradingMarkets interview. Click
here to listen.