Choppy
Yesterday
was choppy and sideways after the early down, but
it still provided some good intraday trading opportunities both long and short.
NYSE volume was just below average at 1.3 billion, a volume ratio of 36, and
breadth -645. Program activity was on the light side as the major indices backed
off from Monday’s highs. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed down 119 points, or -1.3%,
to 8872, with some support starting at 8800 which is also the 21-day EMA. The
trendline from the July 24 low is 8600, which is also the 50-day EMA level; 8500
is the more significant support zone.Â
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed at 937.43, down 1.4%, which is right at the top of the previous breakout
above the 925 – 935 trading range. See your intraday charts back through last
Thursday. 875 – 900 is what has to hold to prevent the SPX from heading south.
The rising wedges on
declining volume for the major indices is not what you like to see. Also, if you
note on your five-day intraday charts, you will see the negative divergences for
the 8,17,9 MACD vs. rising prices to Monday’s high, which is never a positive
dynamic.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) was off 1.8%, and the rising prices after the breakout of the
1200 – 1355 trading range has been on even more declining volume than the NYSE.
The Composite closed at 1377 and downside continuation from yesterday starts
below 1371.Â
Price action and volume
are telling us the indices need to do some more downside work if they expect to
get through the high end of resistance for the major indices. Only a news
catalyst will be able to jumpstart a move without any more backing off from
recent highs.
In the sectors, the OSX
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) declined 4.1% and the SOX
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) -4.8%, but the SOX had
advanced 20% the previous four days. There was substantial volume in the
(
SMH |
Quote |
Chart |
News |
PowerRating)s as many different players cashed in some excellent trading profits
for such a short span.Â
The futures are big green
as I prepare this at 8:00 a.m. EST with the S&Ps +7.70 and the Dow +70.
Maybe we’ll get lucky with some gap openings setting up some good contra trades
during the first half-hour before we see if they are going to run them up today.
In any event, let the trades come to you. Don’t press. If you don’t see the
trade clearly, don’t do it just because you need action.
Have a good trading day.
Five-minute chart of
Tuesday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Tuesday’s NYSE TICKS