CSCO Sets Up First Hour Strategies
What Tuesday’s Action Tells
You
The casino lights were turned on yesterday,
giving
traders some opportunity in both the morning and then the afternoon, with
the
Federal Reserve normal knee-jerk reversal action following the expected
announcement. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) advanced +1.4% to 1079.04 and the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) +1.3% to 9945. The
(
QQQ |
Quote |
Chart |
News |
PowerRating)s lagged at only +1.3% (relative
to
the SPX ), with the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) +1.9% to 1809. NYSE volume was
only
1.25 billion shares, but 1.05 billion was up and 183 million down for a
volume
ratio of 87. Breadth was +1549.
The brokers (XBD) led the primary sectors at
+2.7%, with the
(
CYC |
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Chart |
News |
PowerRating) +2.2%, while the
(
SMH |
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Chart |
News |
PowerRating) also lagged at +1.1%,
so
that cloud remains. The brokers were conspicuous as it was rising price at
below-average volume, but the cyclicals did have some rising price and
increasing volume which was the only common thread in the SPX
screen.
For Active
Traders
After the up-opening in the major indices,
price
traded back into the Slim Jim range (yesterday’s charts), then traded back
out
of the ranges up to the 240 EMAs, where both the SPX and QQQ formed Slim Jims
into the 2:15 p.m. ET Federal Reserve boondoggle. As you can see on the
charts,
the initial move on the Federal Reserve noise was down as the SPX traded to
1068.94, which was back into the trading range on the 2:30 p.m. bar, and as
normally happens, we got the reversal, and the SPX traded up to 1079.04. The
QQQ
had the same reaction from the Slim Jim at the 240 EMA, trading down to
32.97,
then reversing up to 33.47 and closing at 33.21.
For those of you who trade individual stocks,
we
had good trades in yesterday’s focus-list stocks like
(
PCAR |
Quote |
Chart |
News |
PowerRating),
(
SYMC |
Quote |
Chart |
News |
PowerRating),
(
AT |
Quote |
Chart |
News |
PowerRating),
(
BA |
Quote |
Chart |
News |
PowerRating) and
(
BDK |
Quote |
Chart |
News |
PowerRating). There was no energy follow through
yesterday,
but they remain at the same level, so we are ready if they show up today.
Today’s
Action
At 7:45 a.m., I see there is a
(
CSCO |
Quote |
Chart |
News |
PowerRating)
downgrade effect with the S&P futures -4.90, Dow -42 and Nasdaq -11.50.
That
means
First-Hour strategy opportunities today for sure. On the upside for
the
SPX, you have the 480 EMA at 1080, with the 240 EMA below at 1074. Price
gets
below all of the 20, 60 and 240 EMAs trading below 1073.52. CSCO will be the
excuse for the Market Makers and Specialists to open various tech stocks at
deeper-than-normal discounts, so you must be aware of today’s volatility
bands
in these stocks.
If it is a fear day, then they might take the
energy stocks, so keep an eye on
yesterday’s focus stocks.
Have a good trading day,
Kevin Haggerty
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