Chip Bonanza
There
was a big increase in volume yesterday to
1.6 billion. The volume ratio dropped slightly to 72, as did the
breadth to +738. The NDX 100
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) gained 6.5%, the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating), 1.5%, and the Dow 1.8%. It was a chip bonanza as the Generals,
hedge funds and shorts pushed the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) to a 10.7% gain. The
(
$DOT.X |
Quote |
Chart |
News |
PowerRating), which is the Internet index, also gained 10.3%. Squeeze those
dog companies’ shorts. The brokers came up big, with the
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) +7.3%,
while the biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) lit the lamp at +5.2%. There was good follow
through in the cyclicals, while the
(
$RLX.X |
Quote |
Chart |
News |
PowerRating) managed a 2.5% gain.
The gains off the
nine-month cycle low period, in conjunction with three other minor cycles which
came together at the same time, have been nothing less than spectacular over the
past 15 days. The SPX went sideways for just three days, but has yet retrace
anything to the 944.75 Sept. 21 low. We are in a strong alert zone now, with the
.618 retracement at 1094, the 50-day EMA at 1103, and the .786 retracement at
1135. If you didn’t take positions during this strong cycle period and extreme
oversold condition, then don’t be buying up into this advance, which is a strong
alert zone. The index will retrace, and you will get an entry opportunity when
the direction resumes to the upside. Think 1 2 3 bottoms after a retracement,
not chasing moonbeams.
Stocks
Today
In the semis, stay all
over the intraday charts, both ways, and make sure you catch the airpocket
shorts when you see those 1 2 3s or Slim Jim setups. The semis to focus on
because of their volatility and volume are
(
NVDA |
Quote |
Chart |
News |
PowerRating),
(
QLGC |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
KLAC |
Quote |
Chart |
News |
PowerRating),
(
NVLS |
Quote |
Chart |
News |
PowerRating),
(
MU |
Quote |
Chart |
News |
PowerRating), which is lagging,
(
TXN |
Quote |
Chart |
News |
PowerRating) and
(
ADI |
Quote |
Chart |
News |
PowerRating).
The
(
QQQ |
Quote |
Chart |
News |
PowerRating)s closed at
34.70, right on the 50-day EMA of 34.74 and just below the .618 retracement of
35.05, so any intraday short setup in this zone should be taken, in addition to
the
(
SPY |
Quote |
Chart |
News |
PowerRating)s, which I mentioned earlier.
Other stocks:
(
GD |
Quote |
Chart |
News |
PowerRating) has
pulled back to its rising 20-day EMA of 87.62, closing at 88. So, use the moving
average as a pivot either way. Also focus on
(
GENZ |
Quote |
Chart |
News |
PowerRating),
(
ICOS |
Quote |
Chart |
News |
PowerRating),
(
VRSN |
Quote |
Chart |
News |
PowerRating),
(
EMC |
Quote |
Chart |
News |
PowerRating) and
(
RIMM |
Quote |
Chart |
News |
PowerRating).
On the short side, I like
the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s and
(
SPY |
Quote |
Chart |
News |
PowerRating)s at these alert zones if you get a defined intraday
short entry. The
(
BBH |
Quote |
Chart |
News |
PowerRating)s closed at 121.20, just above the 20-day EMA of
120.56 which can be used as a short pivot with a tight stop right above. The
(
SMH |
Quote |
Chart |
News |
PowerRating)s closed at 37.66, filling a gap and right at the 50-day EMA of 37.82
and the .50 retracement at 37.50.
Have a good trading day.
We’re probably going to start the retracement on Friday or Monday.
Five-minute chart of
Thursday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Thursday’s NYSE TICKS
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