Casino ’00’ Day
The
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gave us a +4.8% run from
817.38 to 856.60, then down to the 843 level before another run to 856.12 — 856
is a Cardinal number I mentioned in previous texts. That set up the 1,2,3 double
top with the trend entry below 843, which we got on Friday afternoon as the SPX
broke below 843 on the 12:45 p.m. ET bar and never looked back as many sell
programs hit the tape. The SPX closed at 827.37, or -3.2%, and right on the lows
— 827 is also a Cardinal number.
In previous texts I
stated that the expectation was Generals selling dogs into quarter’s end, while
CNBC jumped on the first up day with its statement that the Generals were buying
for window dressing. There’s nothing at these levels to mark up that
would have a significant portfolio affect. Also, the stocks that are up are not
in the major funds top 10% – 15% holdings.Â
The
(
SMH |
Quote |
Chart |
News |
PowerRating)s ran four
times as much as the SPX, gaining 19.3% from the 18.60 low to the 21.19 high in
three days, but closing at 20 on Friday, -1.8%. Below 19.90 takes the SMHs out
of the closing range on Friday, and below 19.64 puts it below the last three
days’ lows and closes.Â
Looking at the weekly
charts after last week’s action, we see that the SPX closed below its open in
the bottom of its range and had a lower high and lower low for the week. Both
the 10-week and 30-week EMAs are declining, so certainly the overall trend
remains the same. The rally last week didn’t take the SPX back up to its 10-week
EMA, which is a logical short sale zone with stops right above the 10-week EMA.
This is what I call entry at the lowest common denominator. These opportunities
occur both long and short, especially in this kind of market where the news
reactions are exaggerated by media hype and political hacks.Â
Today is the last trading
day of the quarter, so all we can do is just sit, look, and be ready to react to
any overreactions to the casino games that occur today. Early futures are red at
8:00 a.m. ET, with the S&P futures -8, the Dow -73 and Nasdaq -9. My focus
remains on semis and biotechs, and then situations like General Electric
(
GE |
Quote |
Chart |
News |
PowerRating), which will provide a good setup if they can take out the July 23.00 low.
As traders we can’t control war and fraud, so that’s why it is useless for me to
mention much about it with a lot of “what ifs” which we could do all
day long. Instead, I’d rather focus on any extreme reactions to these events and
look for opportunity there.Â
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