Daytraders Can Benefit By Trading The Contra Side
What Thursday’s Action Tells
You
It was a narrow-range day for the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
at just 5.2 points, as the index closed at 1154.88. +0.3%, while the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
was just off -5 points. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) had a 2055 close, at +1.1%,
made back the loss of the previous two days, while the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s, at 36.81,
was +1.1%, vs. the .-1.8% the previous two days.
NYSE volume dropped again to 1.26 billion in
front of Friday’s jobs report and then
(
INTC |
Quote |
Chart |
News |
PowerRating) after the bell yesterday.
The
SPX closed in the top of its range with a volume ratio of 64, breadth +798,
so
that’s a positive.
In the sectors, it was the
(
SMH |
Quote |
Chart |
News |
PowerRating)s that led,
gaining +1.8%, wiping out the previous day’s -1.8% day. Talk about good news,
bad news. The SMH has gone -1.8%, +2.3%, -0.2%, -1.8%, and +1.8% for the past
five days. It sure as hell beats trading the S&P or Dow futures the way
their volatility has contracted.
The brokers had their best day of the past five
days, with the XBD at +1.1%. It has closed in the green for the last four out
of five days. No other sectors really stood out either way, other than some
retail stocks, like
(
WMT |
Quote |
Chart |
News |
PowerRating),
(
KSS |
Quote |
Chart |
News |
PowerRating) and
(
TGT |
Quote |
Chart |
News |
PowerRating), all playing off Wal-Mart’s
news.
| size=2> |
Friday 2/27 |
Monday
3/1 |
Tuesday
3/2 |
Wednesday
3/3 |
Thursday
3/4 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High | 1151.68 | 1157.45 | 1156.54 | 1152.44 | 1154.97 |
| color=#0000ff>Low | 1141.80 | 1144.95 | 1147.31 | 1143.78 | 1149.81 |
| color=#0000ff>Close | 1144.90 | 1155.97 | 1149.10 | 1151.02 | 1154.88 |
| color=#0000ff>% | 0 | +1.0 | -0.6 | +0.2 | +0.3 |
| color=#0000ff>Range | 9.9 | 12.5 | 9.2 | 8.7 | 5.2 |
| color=#0000ff>% Range | 31 | 88 | 21 | 83 | 97 |
| color=#0000ff>INDU | 10584 | 10678 | 10591 | 10593 | 10588 |
| color=#0000ff>% | +.04 | +0.9 | -0.8 | +.02 | -.05 |
| color=#0000ff>Nasdaq | 2030 | 2058 | 2040 | 2033 | 2055 |
| color=#0000ff>% | -0.1 | +1.4 | -0.9 | -0.3 | +1.1 |
| color=#0000ff>QQQ | 36.60 | 37.03 | 36.61 | 36.39 | 36.81 |
| color=#0000ff>% | -0.2 | +1.3 | -1.2 | -0.6 | +1.1 |
| color=#0000ff>NYSE | |||||
| color=#0000ff>T. VOL | 1.50 | 1.45 | 1.48 | 1.33 | 1.26 |
| color=#0000ff>U. VOL | 888 | 1.17 | 532 | 641 | 783 |
| color=#0000ff>D. VOL | 597 | 259 | 931 | 654 | 438 |
| color=#0000ff>VR | 60 | 82 | 36 | 49 | 64 |
| color=#0000ff>4 MA | 60 | 69 | 61 | 57 | 58 |
| color=#0000ff>5 RSI | 52 | 74 | 56 | 58 | 66 |
| color=#0000ff>ADV | 2185 | 2508 | 1436 | 1609 | 2035 |
| color=#0000ff>DEC | 1091 | 791 | 1852 | 1666 | 1237 |
| color=#0000ff>A-D | +1094 | +1717 | -416 | -57 | +798 |
| color=#0000ff>4 MA | +766 | +1194 | +814 | +584 | +510 |
| color=#0000ff>SECTORS | |||||
| color=#0000ff>SMH | -1.8 | +2.3 | -0.2 | -1.8 | +1.8 |
| color=#0000ff>BKX | +0.5 | +0.5 | -0.5 | +0.6 | -.03 |
| color=#0000ff>XBD | +0.3 | +0.9 | -0.3 | +.02 | +1.1 |
| color=#0000ff>RTH | +0.2 | +1.0 | -1.2 | +0.7 | +0.3 |
| color=#0000ff>CYC | +0.6 | +1.6 | -0.9 | -.05 | -.08 |
| color=#0000ff>PPH | -0.4 | +0.3 | -0.9 | +0.2 | +0.4 |
| color=#0000ff>OIH | +.03 | +2.8 | +0.3 | -0.7 | -0.3 |
| color=#0000ff>BBH | +1.2 | +0.2 | -0.2 | +0.9 | +0.7 |
| color=#0000ff>TLT | +0.9 | -.05 | -0.6 | -0.2 | +0.4 |
| color=#0000ff>XAU | +0.7 | +1.1 | -3.2 | -.09 | +1.4 |
^next^
For Active
Traders
The index proxy volume was also very light,
with
the
(
SPY |
Quote |
Chart |
News |
PowerRating) at 57% of its average volume, the QQQs at 70%, the
(
DIA |
Quote |
Chart |
News |
PowerRating)s
68%
and the SMH at 65%. I have included the daily charts of the Nasdaq, QQQ and
SMH,
as all of them are in short-term retracements from their highs. The charts
are
labeled with their 20-, 50- 89- and 200-day EMAs for reference and their
channels drawn to measure levels. No need for the SPX and Dow charts, as
their
trading range is well-defined, trading sideways.
The SPX high rally close is 1157.76, and the
Dow
10,738. The sector rotation to new highs includes the XLF, which is the
financial SPDR, XLP, which is the consumer staples SPDR, and the XLE, which
is
the energy SPDR. Prior to the Dollar flop the other day, the XLBs had made
new
closing highs on March 1.
Today’s
Action
I am doing this Thursday night for Friday, but
the game really doesn’t start until after the jobs report, and the media gets
to make lots of noise, which is usually beneficial to daytraders from the contra
side. You will be playing the “90% – 60%” rule, if there is a jobs
number that the futures can game. You will be involved in Trap
Doors and Gap Pullback setups starting the day.
Have a good trading day,
Kevin Haggerty
P.S. You can finally learn
what traders have been asking me to teach them for years—