Clothesline Day

  • November 1, 2000
  • Kevin Haggerty

It was
essentially a clothesline day with
wire-to-wire price persistence by the S&P 500 — and you don’t get many of
these — as it finished +2.2% without even a three-bar pullback until 3:30 p.m.
after breaking above the first intraday consolidation at 10:30 a.m. The index
played the game above the 20-EMA on your five-minute chart all day. The Generals
worked hard the last day of the month. 


Volume was big at 1.4
billion, with a volume ratio of 75 for a three-day average of 73. Advancing
volume was 992 million vs. declining volume of 325 million as compared with 860
million up and 279 million down on Monday. Advancers led decliners by +1167 vs.
+858 on Monday. Institutional blocks rose to 29,234 vs. 25,223. What I also
liked was that the NYSE stocks above their 200-day EMA rose to 53 vs. 46 last
week. There was, and is, cash on
the sidelines after month end and traders can sit back and take continuation
entries if the train continues in the same direction. The onus is on the
Generals.


The NDX 100 made up
Monday’s -3.3% loss and then some, with a +6.5% day, led by a double-figure
rally in most of the chosen ones and a continuation move by the semiconductors.
The chosen ones that were down the most rallied hard:
(
AMCC |
Quote |
Chart |
News |
PowerRating) +18.6%;
(
BEAS |
Quote |
Chart |
News |
PowerRating) +15.6%; 
(
JNPR |
Quote |
Chart |
News |
PowerRating) +17.3% and
(
NEWP |
Quote |
Chart |
News |
PowerRating) +19%. There were
many of the others that also gained between 10%-15%. The
(
SOX |
Quote |
Chart |
News |
PowerRating) gained +5.5%
to make it a +8% two-day gain. The
(
BTK |
Quote |
Chart |
News |
PowerRating) jumped out at +5.3% and both
Internet indexes, the
(
DOT |
Quote |
Chart |
News |
PowerRating) and the 
(
IIX |
Quote |
Chart |
News |
PowerRating), were each up over
7%. 


The papers and chemicals,
as defined by the
(
FPP |
Quote |
Chart |
News |
PowerRating) and
(
CEX |
Quote |
Chart |
News |
PowerRating), took a rest from their recent gains
with the
(
FPP |
Quote |
Chart |
News |
PowerRating) +0.5% and the
(
CEX |
Quote |
Chart |
News |
PowerRating) +1.1%. The
(
XBD |
Quote |
Chart |
News |
PowerRating) and
(
BKX |
Quote |
Chart |
News |
PowerRating)
both gained with the XBD +1.9% and the BKX +1.7%, so the financials have
sustained their move. You just have to sit back and say, “Way to go,
Generals!” 


FYI, the NDX got out to its 2 standard deviation band of 3266, hitting 3265, but only declined 31 points
from there to 3234, so stopped out at a loss on the way back above 3265. The
second entry was after the 3285 high with a narrow-range reversal bar and it
only declined to 3265, the 2 band, before reversing the 3285 high again
stopped out at a loss. The third entry was below the low of a narrow-range bar,
with a 3305 high, and this led to victory at last as the NDX declined 71 points
to 3234. This got back the first two stop losses plus a few. When you take
trades at these extreme volatility bands with tight stops outside the bands, you
can keep in the game and play again. That’s what it’s all about.














face=”arial, helvetica”>(December Futures)


Fair
Value

size=2>Buy

size=2>Sell


10.60


12.00

9.40


Pattern
Setups


This is a
sit-back-and-see-what-happens day after the month-end rush. First entries, if
you get them, are not advised on 100% of your normal positions. Second entries
will be the best trades. Also, any kind of action that is sustainable will come
from your intraday charts, both long and short. 


Stocks today are
(
PWER |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
PDLI |
Quote |
Chart |
News |
PowerRating),
(
BRCD |
Quote |
Chart |
News |
PowerRating),
(
NTAP |
Quote |
Chart |
News |
PowerRating),
(
CIEN |
Quote |
Chart |
News |
PowerRating),
(
MACR |
Quote |
Chart |
News |
PowerRating),
(
GMST |
Quote |
Chart |
News |
PowerRating),
(
CHKP |
Quote |
Chart |
News |
PowerRating),
(
VSTR |
Quote |
Chart |
News |
PowerRating),
(
SUNW |
Quote |
Chart |
News |
PowerRating),
(
LEH |
Quote |
Chart |
News |
PowerRating),
(
GS |
Quote |
Chart |
News |
PowerRating),
(
NVLS |
Quote |
Chart |
News |
PowerRating) and also
(
AOL |
Quote |
Chart |
News |
PowerRating) —
looks like they want to try to get it going again.


Have a good trading day. 

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