Cycle Year
The
program direction for Triple Witch expiration was down, right
on the opening bell, then a very brief contra reflex before the indices headed
south into the close. The SPX
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11:30 a.m. to 3:15 p.m. before we got a trading opportunity on the breakout to
the downside. The
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low before closing at 99.28.
NYSE volume was expanded
with the programs to 1.8 billion, which is about 40% above average, a volume
ratio of 27, and breadth -382. The Nasdaq
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than its average volume at 1.9 billion and breadth a push at -59.
The major indices
declined for the third straight day after the SPX retracement from 982 to the
20-day EMA and a 1041 reflex high. The SPX closed in the bottom of its range in
each of the past three days. For
the day, the Dow was -1.9%, and -4.8% for the three days. The SPX ended -1.7%,
and -4.7%, while the Nasdaq was -1.6%, and -6.7% for the three days, with the
NDX
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The daily charts
obviously don’t show anything except selling pressure, with the NDX having
broken the September lows again and closing below for the second day. The best
joke I heard last week was the major brokerage firm downgrading the telecoms,
and then the TV showed the list, and I don’t think there was a stock above $5.00
on it. Hard to believe what goes on sometimes.
With all of the basic
indicators extremely oversold, you should certainly be ready to play both ways
on the intraday setups, especially in the semis, where the
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down 16.2% in the last four trading days. Early green has turned to red as I
finish this up at 7:45 a.m., but a weak opening will probably provide you with a
better contra reflex first move from the oversold condition. The
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traded at 25.47 and were down -1.4% when I checked at 7:45 a.m. CVRs
1, 2 and 3 are all green, but you should use these in conjunction with a
reversal pattern. I hope you have your strategy ready for playing the major
cycles that all come together in 2002.
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