BTK Buying Pressure

• January 7, 2002
• Kevin Haggerty

For
the third day in succession, the
major indices closed up, with the SPX
(
$SPX.X |
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(
$INDU |
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and the Nasdaq
(
$COMPQ |
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PowerRating) +0.7%, keeping the opening-of-the-year five-day scoreboard on the
plus side. The semis took a rest and have advanced 75% during this rally, having
recrossed their 200-day EMA and closing there the past two days. There was no
real selling pressure in the semis on Friday.

The brokers had a big
follow-through day, as buying pressure followed the
(
$XBD.X |
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bar breakout on Thursday from an 18-bar daily chart Slim Jim above all of its
EMAs. The XBD closed at 553.67 and has rallied approximately 74% since the
September lows. The .618 retracement to the 709 high is 560 with the .707
retracement just above at 594 and the .786 at 625. Expect some churning into
these levels.

The most significant
buying pressure on Friday was in the major biotechs. I said last
Thursday that the
(
BBH |
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they trade down to the 123-124 level, and I said that’s the level where you
could get a good reflex move. There is a confluence of a Fib retracement, the
200-day SMA and a proprietary pattern that I use at that level. Net net, the
intraday low on Friday was 124, and the BBHs rallied to close at 129.77. This
reversal for the BBHs was on price, significant volume and range expansion from
a key alert zone. Friday’s action puts the biotechs at the top of our focus list
this week, regardless if the biotechs give us a small opposite day today.
Looking for Generals in all the right places is what the game is.

Keep in mind this rally
is pushing the envelope, as the SPX is at the beginning of the 1174-1208
resistance zone, and we are very short-term overbought. Seminar attendees should
be on alert seeing that the SPX made a higher high on Friday. The SPX made a 1 2
3 higher high on Friday, then reversed the 1173.62 previous high, with an
intraday chart short entry, and you caught a quick 10 point down move in the SPX
to 1163.42 before it reversed, closing at 1172.61. It was a 1 2 3 higher high
because it had initially broken its up trendline when it traded down to 1104.50
on Dec. 14.

Stocks
Today

Biotechs:
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IDPH |
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(
GILD |
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GENZ |
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QLTI |
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CEPH |
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ITMN |
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(
ICOS |
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(
SCIO |
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(
EMIS |
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Other stocks:
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PX |
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(
APD |
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FITB |
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(
NTRS |
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(
C |
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(
BAC |
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(
COF |
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(
APA |
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(
SLB |
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(
IGT |
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(
SYMC |
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(
PCAR |
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(
YUM |
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FDC |
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and
(
DISH |
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PowerRating).

Have a good trading day.

Five-minute chart of
Friday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Friday’s NYSE TICKS