Bungee Cord Alert
NYSE
volume expanded to 1.4 billion on Friday, which
was 30% above its average and the largest volume day of the week. This was due
to the
(
SPX |
Quote |
Chart |
News |
PowerRating) attacking its April low of 1081 and the implosion of the basic
industry stocks in the Dow. The intraday low for the SPX was 1082.12. The NYSE
volume ratio was just 23 and breadth negative at a whopping -1283 for a five-day
average of -508. Along with the TRIN, option indicators, McClellan Oscillators
or whatever else you look at, it spells deeply oversold. The Dow declined -2.4%,
and the SPX -1.9%, but the
(
NDX |
Quote |
Chart |
News |
PowerRating) only gave back -0.5%, with the
(
SOX |
Quote |
Chart |
News |
PowerRating)
actually finishing slightly green.
Friday was a bonus day
for daytraders with four defined tradable moves. The first was the reversal of
the 1348.52 April low which ran to a 1390 Fib retracement level. Then a
downtrend to a double bottom at the 1340 level. This was an RST long entry which
rallied to 1379.70, another Fib retracement level, then declined into the close
at 1354. If you took three of the four entries, you’re a star. If you had four,
it was tantamount to hitting 71 home runs.
The Dow traded the most,
relative to its average daily volume, with a volume ratio of just 10. There were
obviously many bottom-of-the-range closings on increased volume, so we must be
alert for continuation shorts today. But based on the early red I see at 7:45
EST, there will be gap-down openings, so the sequence will probably be Trap
Doors and volatility bands, then possibly a contra-rally which might set up some
short opportunities in the basics. That’s the major benefit of daytrading, you
just have to react to the overreactions, not predict them. If we are lucky
enough to get a plain vanilla trend day, then it’s a bonus.Â
(September
|
||
Fair Value
|
Buy
|
Sell
|
1.00
|
2.00
|
.10
|
Stocks
Today
The major decline was in
the cyclical indexes, so from the short side, focus on
(
MMM |
Quote |
Chart |
News |
PowerRating),
(
DD |
Quote |
Chart |
News |
PowerRating),
(
WY |
Quote |
Chart |
News |
PowerRating),
(
DAL |
Quote |
Chart |
News |
PowerRating),
(
AA |
Quote |
Chart |
News |
PowerRating) and
(
CAT |
Quote |
Chart |
News |
PowerRating). Because of how they traded Friday with gaps
and wide-range bars, second entry shorts and retracements make more sense. Also,
in the brokers — and there’s more news coming from the brokers this weekÂ
and next on continued layoffs in all areas — I’d look at
(
GS |
Quote |
Chart |
News |
PowerRating),
(
BSC |
Quote |
Chart |
News |
PowerRating),
(
LEH |
Quote |
Chart |
News |
PowerRating)
and
(
MER |
Quote |
Chart |
News |
PowerRating).Â
On the longside, believe
it or not, there are some, take a look at
(
TEVA |
Quote |
Chart |
News |
PowerRating),
(
BLS |
Quote |
Chart |
News |
PowerRating),
(
YUM |
Quote |
Chart |
News |
PowerRating),
(
SIAL |
Quote |
Chart |
News |
PowerRating),
(
BGEN |
Quote |
Chart |
News |
PowerRating),
(
IMCL |
Quote |
Chart |
News |
PowerRating),
(
QCOM |
Quote |
Chart |
News |
PowerRating),
(
CHV |
Quote |
Chart |
News |
PowerRating),
(
VRSN |
Quote |
Chart |
News |
PowerRating), and in the semis,
(
NVDA |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
RFMD |
Quote |
Chart |
News |
PowerRating),
(
MCHP |
Quote |
Chart |
News |
PowerRating) and
(
NSM |
Quote |
Chart |
News |
PowerRating).
Also, stay tuned in to the
(
SMH |
Quote |
Chart |
News |
PowerRating)s, which closed at 39.77, right in that 39.11 .786 retracement
zone.Â
Have a good trading day,
and remember, we’re going to have some sharp spikes up and down over these next
few days.
Five-minute chart of
Wednesday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Wednesday’s NYSE TICKS
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