Big Airpocket

  • November 9, 2000
  • Kevin Haggerty

Yesterday
proved to be that good day to go shopping and
forget about daytrading, unless you got involved in the chosen ones on the short
side as they took out the previous day’s lows. The
Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) closed at 3060, -6.7% and 50 points below the 2 standard
deviation band. The Generals were non-existent on the buy side and liquidity was
poor, with large percentage declines on lighter volume.


Over half
of the chosen ones had declines of 10% or more. If you were in front of your
screen you saw some good short setups, especially opening reversals. For
example,
(
JNPR |
Quote |
Chart |
News |
PowerRating) opened at 210, traded up to 214 3/8 by the second bar, then
reversed 210 to the downside which put it below all three EMAs. The 260-day EMA
was 210. 


After
reversing 210, it traded below the previous day’s low of 208.5 and down to 188,
closing at 188.18. There was some buy side volume that came in below 195 and
JNPR will probably have a good reflex rally some time today and it should be on
your screen as you look for that first intraday setup.


The S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating) ended
-1.6% on only 909 million total volume, with a volume ratio of 44. Decliners
only led advancers by 179. Institutional blocks dropped off, as expected, to
19,170. 


For the daytrader, price is
everything, so don’t waste any time on the Florida fiasco. Just take what the
intraday chart gives you. You can control that risk, but not what they do in
Florida! The ideal situation today will be a “puke” shot by retail
early that will be welcomed by a substantial discount by the professionals and
then you might get an excellent reflex rally. 


To be ready for this, I suggest
you pick out only about five or six of the chosen ones that you are familiar
with and focus on them so you don’t miss the first setup. 














face=”arial, helvetica”>(December Futures)


Fair
Value

size=2>Buy

size=2>Sell


8.85


10.05

7.60


The five or six OTC stocks
I prefer are: 



(
JNPR |
Quote |
Chart |
News |
PowerRating),
(
ARBA |
Quote |
Chart |
News |
PowerRating),
(
CIEN |
Quote |
Chart |
News |
PowerRating),
(
CHKP |
Quote |
Chart |
News |
PowerRating), and
(
BEAS |
Quote |
Chart |
News |
PowerRating). These stocks are a
playground for many different players, but certainly there are other stocks such
as:
(
MERQ |
Quote |
Chart |
News |
PowerRating),
(
AMCC |
Quote |
Chart |
News |
PowerRating),
(
NEWP |
Quote |
Chart |
News |
PowerRating),
(
NTAP |
Quote |
Chart |
News |
PowerRating), and
(
BRCM |
Quote |
Chart |
News |
PowerRating) that will provide
opportunity but the pace will be fast and if you focus on too many of the
stocks, you oftentimes end up getting frozen and do nothing.


On the listed side, for
intraday reflex rallies I would focus on
(
GLW |
Quote |
Chart |
News |
PowerRating) and
(
EMC |
Quote |
Chart |
News |
PowerRating). 


The short side is no
mystery, as you know where yesterday’s lows are, but if you take continuation
short entries, keep tight stops.


Have a good trading day.

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