Bonus Day For Daytraders
What Friday’s Action Tells
You
You have to love the first Friday of each
month’s
job fiasco. It does create opportunity. Friday was a real bonus day for
daytraders, as the 10:00 a.m. ET (sound familiar?) surge in futures lifted
all
ships. In 35 minutes, the S&P E-minis went from 1126.75 to 1139.75 on
the 10:35
a.m. bar. That was it for the day until a little pop in the last two hours
to
1142, closing at 1139.50. It was only a 35-minute game, but it was all you
needed. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) re-crossed the 20-day EMA on that 10:00 a.m.
spike and never revisited that pivot again, but you were ready for it after
seven days hanging out right at the 20-day EMA.
Technology led, and this put the SPX +1.3% on
Friday and +1.8% on the week, closing at the weekly high. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
was +1.5% on the week and +0.9% on Friday. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating)
finished
+2.2%, and the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s +1.8%, but even with Friday’s price action,
finished
flat at -0.2% on the week. NYSE volume was the lightest of the past five
days,
despite the price advance, but it was all one-sided with the volume ratio at
86
and 1.25 billion up. Breadth was at +1992, the best since Oct. 1,
2003.
The primary sectors on Friday were led by the
(
SMH |
Quote |
Chart |
News |
PowerRating)s
+4.3%, XBD +2.4% and CYC +2.2%, which is what we want to see. I was happy to
see that some of those Generals’ Pullbacks setups took off on Friday on decent
volume, so you know a few of the Generals reloaded.
| size=2> |
Monday
2/2 |
Tuesday
2/3 |
Wednesday
2/4 |
Thursday
2/5 |
Friday
2/6 |
Net
|
| color=#0000ff>Index | ||||||
| color=#0000ff>SPX | ||||||
| color=#0000ff>High |
1142.58
|
1137.44
|
1136.03
|
1131.17
|
1142.79
|
1142.79
|
| color=#0000ff>Low |
1127.87
|
1131.33
|
1124.74
|
1124.44
|
1128.39
|
1124.44
|
| color=#0000ff>Close |
1135.26
|
1136.03
|
1126.53
|
1128.59
|
1142.76
|
1142.76
|
| color=#0000ff>% |
+0.4
|
+.07
|
-0.8
|
+0.2
|
+1.3
|
+1.8
|
| color=#0000ff>Range |
14.7
|
6.1
|
11.3
|
6.7
|
14.4
|
18.4
|
| color=#0000ff>% Range |
50
|
77
|
16
|
62
|
100
|
100
|
| color=#0000ff>INDU |
10499
|
10505
|
10471
|
10496
|
10593
|
|
| color=#0000ff>% |
+0.1
|
+.06
|
-0.3
|
+0.2
|
+0.9
|
+1.5
|
| color=#0000ff>Nasdaq |
2063
|
2066
|
2014
|
2020
|
2064
|
|
| color=#0000ff>% |
-0.1
|
+0.1
|
-2.5
|
+0.3
|
+2.2
|
0
|
| color=#0000ff>QQQ |
36.97
|
36.95
|
36.34
|
36.46
|
37.13
|
|
| color=#0000ff>% |
-0.3
|
-.05
|
-1.6
|
+0.4
|
+1.8
|
-0.2
|
| color=#0000ff>NYSE |
|
|
|
|
|
|
| color=#0000ff>T. VOL |
1.58
|
1.48
|
1.62
|
1.57
|
1.46
|
1.54
|
| color=#0000ff>U. VOL |
880
|
644
|
422
|
915
|
1.25
|
822
|
| color=#0000ff>D. VOL |
657
|
824
|
1.18
|
650
|
194
|
701
|
| color=#0000ff>VR |
57
|
56
|
26
|
58
|
86
|
|
| color=#0000ff>4 MA |
43
|
52
|
48
|
49
|
56
|
|
| color=#0000ff>5 RSI |
48
|
50
|
35
|
40
|
63
|
|
| color=#0000ff>ADV |
1787
|
1691
|
895
|
1744
|
2663
|
1756
|
| color=#0000ff>DEC |
1506
|
1603
|
2362
|
1536
|
671
|
1536
|
| color=#0000ff>A-D |
+281
|
+88
|
-1467
|
+208
|
+1992
|
+11.2
|
| color=#0000ff>4 MA |
-480
|
-91
|
-236
|
-223
|
+205
|
|
| color=#0000ff>SECTORS |
|
|
|
|
|
|
| color=#0000ff>SMH |
-1.4
|
+0.9
|
-2.7
|
+0.4
|
+4.3
|
+1.4
|
| color=#0000ff>BKX |
+.05
|
-0.2
|
-0.5
|
-0.3
|
+1.6
|
+.07
|
| color=#0000ff>XBD |
-0.2
|
+0.1
|
-1.9
|
-0.4
|
+2.4
|
0
|
| color=#0000ff>RTH |
+0.3
|
-0.1
|
+0.6
|
+1.2
|
+1.4
|
+3.4
|
| color=#0000ff>CYC |
-0.5
|
-0.7
|
-1.1
|
+0.6
|
+2.2
|
+0.5
|
| color=#0000ff>PPH |
+1.2
|
+0.8
|
+0.8
|
+0.1
|
+0.6
|
+3.5
|
| color=#0000ff>OIH |
+1.2
|
-0.6
|
-0.4
|
-1.7
|
+0.9
|
-0.6
|
| color=#0000ff>BBH |
+1.9
|
+0.4
|
-1.6
|
-0.4
|
+1.0
|
+1.3
|
| color=#0000ff>TLT |
-0.3
|
+0.5
|
-0.3
|
-0.4
|
+1.1
|
+0.6
|
| color=#0000ff>XAU |
+0.5
|
-0.1
|
-1.5
|
+1.4
|
+4.8
|
+5.1
|
^next^
For Active Traders
I have included the daily chart of the SMH
showing the initial setup that we were prepared for, as it had retraced .618
to
the 38.41 low, the last setup we had that ran to 45.78, +19%, in 18 days,
which
couldn’t be sustained. It retraced to the 89-day EMA zone again, which was
just
below the .618 retracement of 41.22, so we were just waiting for someone to
show
up and play the game Friday, which they did.
We got trade-through entry of Thursday’s
41.11
doji-bar high and re-cross of the 41.22 .618 retracement level. The entry is
show on the five-minute chart, as the SMH opened at 40.98, ran to 41.41,
then a
four-bar pullback to 41 before trading above the 41.11 high, never to look
back.
It ran to a 42.56 high, closing at 42.50, +4.3%. The five-minute charts that
you
see were all cut off prior to the close in the afternoon, so the final high
price is not shown. The volume was 17.05 million, the most volume since the
last
retracement to 38.41, so that is positive.
If you played
(
INTC |
Quote |
Chart |
News |
PowerRating) instead, you had
the
same opening pattern, with the pullback to the intersection of Friday’s
opening
bar low and Thursday’s last-bar high. The pullback was on light volume after
the
significant volume on the opening two bars, so the entry decision was easy.
INTC
traded up to 30.94, closing at 30.88. The stock held the lows of what is
actually a triple top trading range for the past 3.5 months, and you were
ready
for the trade Friday because it was at a good reward-to-risk level, and the
five-day RSI had dropped to below 20 again, just as it did in mid-December
when
the rally off the 89-day EMA ran from 29.66 to 34.60 on Jan. 9, +16%. Who
knows?
You might still be long when the momentum traders come in to buy on the
breakout
above 34.60 and you can scale your stock into their little happy
hands.
However, INTC’s action over the past four
days
has been erratic. On Tuesday, INTC was +3.6% on 62.4 million shares;
Wednesday
it reversed -4.4% on 79.4 million shares; Thursday it was -.03% on 74.7
million
shares, but it was the narrow-range day (.69) of the three days, so the
demand
side showed their hand at the level. INTC was +3.2% on Friday, but on only
55.4
million shares, so you get my drift.
The QQQ was also a gap pullback and ended
+1.8%
after hitting a 37.28 high, closing at 37.13. The QQQ traded 107.2 million
shares and was a re-cross of the 50-day EMA, which is 36.65.
Today’s
Action
This is being done Sunday for Monday, but the
focus remains the same for the SMHs and QQQs. I will also keep some of those
basics on the focus list that have retraced, like
(
CAT |
Quote |
Chart |
News |
PowerRating) which re-crossed
and
closed above its 89-day EMA on Friday,
(
IP |
Quote |
Chart |
News |
PowerRating),
(
AA |
Quote |
Chart |
News |
PowerRating) and
(
IR |
Quote |
Chart |
News |
PowerRating). If the
brokers get some play, look at
(
MWD |
Quote |
Chart |
News |
PowerRating) and
(
GS |
Quote |
Chart |
News |
PowerRating).
The energy stocks didn’t have much action on
Friday, which was the eighth retracement day for some, like
(
BHI |
Quote |
Chart |
News |
PowerRating),
(
RIG |
Quote |
Chart |
News |
PowerRating),
(
NBR |
Quote |
Chart |
News |
PowerRating) and
(
DO |
Quote |
Chart |
News |
PowerRating), all sitting on their 20-day EMAs, so they
will
stay on the radar.
Individual semis to watch that made the 3-day
Wake Up Call after Friday’s action with good price and volume moves are
(
ADI |
Quote |
Chart |
News |
PowerRating),
(
TER |
Quote |
Chart |
News |
PowerRating) and
(
LLTC |
Quote |
Chart |
News |
PowerRating).
(
MXIM |
Quote |
Chart |
News |
PowerRating) had a big price day,
+7.7%, on
76% more than its average volume, so I will look for any gap pullback setups
there.
Also,
(
MSFT |
Quote |
Chart |
News |
PowerRating) is sitting at the 200-day
EMA,
which is 26.88, having closed Friday at 27.08, so we are ready for some of
the
usual culprits to show up after the stocks has declined from 28.83 to 26.83
on
Thursday.
Have a good trading day,
Kevin Haggerty
P.S. You can finally learn
what traders have been asking me to teach them for years—