Early Or Late
The
early enthusiasm carried the NDX
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$NDX.X |
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(
$SPX.X |
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to their .38 retracement levels to the recent rally highs, which is 1710 for the
NDX and 1177 for the SPX. The intraday high for the NDX was 1586.34 and 1139.50
for the SPX. The early bounce was over by that 10:05 a.m. bar, and the major
indices were choppy and south from there, closing on the lows for the NDX. I
didn’t like the action for just the second day of the bounce. Having said that,
there were many trade-through entries in yesterday’s
mentioned stocks for decent gains, but the game ended early.
Low to high, the
(
SWH |
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(
QQQ |
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unnoticed and unplayed by most. That same 8.0% on the Dow for this bounce is 775
points and would be headlines in every paper and on every TV program proclaiming
the bull. It’s not where to buy this bounce now for short-term traders, it’s how
much of your position have you sold into the rally and where you plan to short
the proxies into resistance. We all know where the continuation major trend goes
and where those highs are. It’s a no-brainer.
The biotechs, after two
up days, declined 2.2%, kind of like Taylor’s three-day sequence of a buy day,
sell day and then the sell short day. Positions overnight in biotechs without
options strategies are landmines. Next focus level on the
(
BBH |
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116-117. They closed at 123.70 vs. the 200-day SMA pivot of 124.75, so you’re
focused on that still, both ways. The price is now below all
moving averages.
There is confluence of
resistance from 1140-1160 on the SPX. The 10-week EMA is 1139, and this is also
the .38 RT zone that sent the index down yesterday. Next you have the 30-week
EMA at 1149, which is also the .50 RT zone. The tougher resistance is at the
.618 RT zone at about 1155, and then some square of nine/cardinal numbers right
above that. So, to get past 1160 near-term, the Generals will have to have much
more conviction than I see on this bounce. Remember the risk/reward credo:
Entries at key inflection points with tight stops are the ultimate risk
management tool aside from options strategies.
Stocks
Today
Pattern setups today from
the daily charts on the longside: If they take the semis, look at
(
BRKS |
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(
NVDA |
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(
BRCM |
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Other stocks to focus on
are
(
PCAR |
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(
NETA |
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(
CAKE |
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(
DGX |
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(
QSFT |
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(
VAR |
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(
ADSK |
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(
TJX |
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(
STJ |
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(
ISSX |
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(
FDS |
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PowerRating).
On the shortside, you
certainly want to focus on the proxies on any kind of rally into the resistance,
and also, if they turn them red today,
(
BSC |
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PowerRating),
(
MWD |
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(
HD |
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(
GE |
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and
(
PHA |
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PowerRating).
Have a good trading day,
and have a great weekend.
Five-minute chart of
Thursday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Thursday’s NYSE TICKS
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Additional
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