Bonus Day
It was just an
outstanding trading day from the extreme Standard Deviation Band zone
for the major indices and SMHs. In addition to the index proxies, our focus on
the Semis and
biotechs was rewarded. The
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$SOX |
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344 band as it did last week, and gained +6.9% while the
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was +5.8%. Thank you, shorts.
New York Stock Exchange volume expanded
big time to 2.1 billion shares, almost 60% above average, with a volume ratio of
54. Most all of the up volume obviously came on the initial Trap Doors, then the
afternoon reversal for all of the indices, etc. Breadth was -675 and that points
out how the program stocks ruled.
The Nasdaq
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$COMPQ |
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traded 2.26 billion shares, volume ratio much better at 69, led by Tech, but the
breadth was still negative at -539. At day’s end, the Dow
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$DJX.X |
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closed at 8802, -0.1%, on a rebound from an 8605 low, while the
S&P 500
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$SPX.X |
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+0.7%, and the Nasdaq at +2.1% with the NDX
100
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$NDX |
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advanced with the help of short covering.
The initial trades on the SMHs and
indices were clearly defined Trap Doors with excellent profit range. For
example, entry in the S&P futures was above 910 and they ran to 925 without any
threat of a stop out. The SMHs ran from entry above 27.20 to 28.44. The DIAs
gave you a run from 87.35 to 88.80. The second long opportunities came in the
afternoon, led by the positive divergence in the SMHs with a 1-2-3 entry just
below 27.50 that ran to a 29.58 high.
As the SMHs made a 1-2-3 Higher Bottom,
the QQQs were making a Double Bottom, so the Semis were clearly market leaders.
As the techs were positively diverging, both the SPX and DJX made lower intraday
lows, but gave you Fib extension entries at the same time as the SMH and QQQ
entry.
The SPX entry from the 1.27 extension of
the Trap Door leg up which was from the 1.5 Volatility Band of 900.96. The exact
low was 900.94. The DJX was a deeper low, and gave entry at the 1.618 Fib
extension. The intraday low was 86.05 while the 2.0 Volatility Band was 85.69,
the 1.5 Volatility Band was 86.30.
After the Fib extension entries, you had
another entry chance for the SPX and DJX on 1-2-3 Higher Bottoms around 1:15
p.m. (Time sound familiar to you sequence traders?) This entry was for the big
afternoon ride, and the entry was not far above the previous Fib extension
entries. I hope all of my fellow sequence traders caught these moves and I trust
all of you at least had the initial Trap Door entries. If you didn’t, it’s
because you sat there listening to the idiot box, were depressed, and assumed
they were going lower. You didn’t take what you saw, and you were prepared in
advance at the extreme Standard Deviation Bands, both one-day and longer term,
as I mentioned in the morning commentary. The Grail, folks, is getting past that
emotional hurdle.
Yesterday was too good and the sun’s out
today, so I’ll see you all on Monday. Have a great weekend.