Daytraders Benefit From Discount Or Premium Action
What Wednesday’s Action Tells
You
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) reversed Monday’s
+1.0%
gain and finished at 1184.63, -1.0%, with the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) -0.8% to
10,540.
Technology and small caps led the downside, as the
(
QQQQ |
Quote |
Chart |
News |
PowerRating) was -1.6%,
closing at 38.08, Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) 2074, -1.5%, XLK -2.1% and the
(
IWM |
Quote |
Chart |
News |
PowerRating) -1.4% (Russell 2000 index proxy). There was semiconductor weakness
again following Tuesday’s
(
SMH |
Quote |
Chart |
News |
PowerRating) anemic +0.5% day (relative) as the SMH
ended
-2.4% to 30.76 back into the 31 – 29 zone that has already produced several
good
intraday trades recently.
NYSE volume was 1.5 billion shares, the
volume
ratio 25 and breadth -725 which also highlights the fact that there was
considerable program volume in the big-cap stocks, not broad participation.
The
(
SPY |
Quote |
Chart |
News |
PowerRating) traded in a
Slim Jim range
between
119.27 – 118.90 from 10:30 a.m. ET to 3:10 p.m. when the futures-driven sell
programs hit the floor, taking the SPY down to a 118.22 close. It was a good intraday chart pattern, along with the earnings noise, to initiate the sell
programs on the futures side, then being able to buy some stock lower as the
new
lows on the day, below 118.90, brought out the sellers. It was a nice
finesse
job by the Program Team. (It’s a great game, and they have it all to
themselves
right now for the wrong reasons.)
After yesterday’s market action, the
(
DIA |
Quote |
Chart |
News |
PowerRating) —
the Dow proxy — remains in a six-day trading range between 106.30 – 104.81.
Yesterday’s high was 106.25, right at the initial resistance. The close was
105.25 with the 50-day EMA at 105.36 and 20-day EMA at 106.15. The 5 RSI
remains
in an upward trend after a 17.95 low on 01/05, 27.70 low 01/13 and it closed
yesterday at 39.51 with the DIAs still in a six-day 1.4% range. Suffice to
say,
that will be resolved quickly (see today’s chart).
As of 8:00 a.m., there appears to be
sufficient
red futures activity to give us a discount opening and that is what
sets
up the initial two First-Hour strategies that many of you have already
learned.
My price zones are very clearly defined in the last several
commentaries.
Have a good trading day,
Kevin Haggerty
