Before Thinking Of Trap Doors, Look At This Level
What Monday’s Action Tells
You
The market action was good as the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) held the 200-day EMA level again for the third day with an
1103.33 intraday low and closing at 1114.04, +0.5%, right at the 1115 – 1113
price zone, which is now minor resistance. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) lagged at
+0.2%
to 9956, while the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) was +1.3% to 1937.
My favorite, based on the recent trading
action,
has been the
(
QQQ |
Quote |
Chart |
News |
PowerRating), which closed at 36.14, +1.4%. Last week all of the
other
major indices were in the minus column for the week, with the SPX and Dow
each
-1.2%. However, the QQQ was +0.1% on the week, and Friday’s volume was 129.2
million, the most since 07/22. The QQQ held above its 35.20 – 34.95 major
support zone, having made a 35.28 low on Friday.
NYSE volume was 1.38 billion with the volume
ratio fairly neutral at 55 and breadth just +306. On Friday, as I had
mentioned,
these numbers were more positive than the +0.4% gain for the SPX and Dow,
while
yesterday’s are not as good as the +0.5% SPX gain. With the good news/bad
news
market we have been in, this divergence is happening more often than not.
The retail (RTH) sector was the only primary
sector that really outperformed, with the RTH +1.4%. The
(
OIH |
Quote |
Chart |
News |
PowerRating) was -1.8%
and
has been banging back and forth lately from a very extended level with the
up/down media oil hype. The BBH was -1.5%, but is not a telltale sector when
evaluating the overall institutional participation, as it is a very
speculative
and dangerous sector for traders.
For Active
Traders
There were many “Above the Line”
stocks that
broke out of daily chart patterns yesterday and Friday, like
(
SYMC |
Quote |
Chart |
News |
PowerRating) and
(
QCOM |
Quote |
Chart |
News |
PowerRating), which you should be aware of from the focus list several weeks
ago.
Daytraders caught the afternoon trend up move yesterday, with the best being
the
QQQ. Price had declined to 35.41 on the 11:00 a.m. ET bar, which was the
.786
retracement to Friday’s 35.28 low. Price then reversed, trending up to a
36.25
intraday high before closing at 36.14.
The
(
SPY |
Quote |
Chart |
News |
PowerRating) traded up to a 111.90 high from
the
110.70 retracement zone, closing at 111.68. The 480 EMA (five-minute chart)
is
111.78 and price traded around that level from 12:25 p.m. into the
close.
Today’s
Action
The media is hyping some of the
“positive
earnings” reports and also the back off in the oil price, so the early
futures
are green, with the S&Ps +4.9 points, Dow +45 and Nasdaq +13. This is
before the
CPI report. If the green holds, the SPX should trade through that 1115
level,
with the next resistance at 1120 – 1122. Yesterday’s rally came on the
eighth
day down from the 1142.05 swing point high, and yesterday was a
change-in-direction bar with a close above the previous day’s high and also
above the last two closes. This tells you that price must get extended to
the
1120 – 1122 level today before thinking about any
Trap Door plays. The best
trade will probably be the retracements off the early highs if price resumes
the
direction of the open (“90% – 60% rule”).Â
Have a good trading day,
Kevin Haggerty
Spend the next year trading with me.Â
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