Don’t Get Sucked Into Longer-Term Positions

It was semiconductor day at “the casino”

and is now +23% in 27 days, and unsustainable short term. It was another light

NYSE volume day at 1.28 billion shares, with a volume ratio of 49 and breadth

-80, both neutral. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was virtually unchanged, up 0.21 to

1194.07, while the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) was -20 points (-0.2%) to 10,504, the

the other primary sectors were all red with the XBD -0.8%, RTH -0.5%, CYC -0.4%

and BKX -0.3%. Energy had another green day with the
(
OIH |
Quote |
Chart |
News |
PowerRating) +0.5% and XLE

+0.4%. The
(
TLT |
Quote |
Chart |
News |
PowerRating) was +0.3% and is now in an RST sell zone waiting for a

confirmation close below the low of the high day, which will not take long.

The major indices have all entered their .618

retracement zones to the bull cycle highs, with the DIA currently lagging with a

104.85 close yesterday and with sequence confluence from 106 – 106.20 (see

chart).

It won’t take much to move price into the holiday

week, so be nimble in your daytrading. The strategies outlined in the 05/19

commentary have been 70% implemented, with the balance to be completed on any

further strength into this holiday weekend. Several delta neutral strategies

have also been put on vs. some of the tech stocks that are at very extended

three- and six-month standard deviation levels.

Our focus entering the week was technology and

energy, and it has been very profitable, so that certainly remains the same

through the holiday. The downside air pocket will arrive sooner than you think,

so don’t be getting sucked into longer-term positions at these squeeze levels

just because you might have missed the extended downside buy entries preceding

this move.

Have a good trading day,

Kevin Haggerty

P.S. I will be
referring to some charts here:
www.thechartstore.com in the future.