Early Red Triggered The 1st Hour Strategies
What Tuesday’s Action Tells
You
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) traded below its
20-day
EMA of 1146.20 and trended down all day, hitting an 1136.85 low on the 3:20
p.m.
ET bar, then closed up a few points in the last half-hour to 1140.57, -0.6%
on
the day. The SPX on a close-to-close basis from the high rally close of
1157.76
is just -1.5%, but after two days down, the media is fueling the fire. The
1136.85 low is right at the three-month 2.0 band. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) also
bounced off the same 2.0 band zone, closing at 10,457, -0.7%.
NYSE volume expanded to 1.48 billion, the volume
ratio was 18, with breadth -833. The down volume was almost the same as Monday’s
total volume. The biggest volume increase was in the
(
SMH |
Quote |
Chart |
News |
PowerRating)s, the only sector
green at +0.6%, following Monday’s -4.1% day. The SMH traded 26.3 million shares
vs. its 14.2 million average. The
(
QQQ |
Quote |
Chart |
News |
PowerRating)s closed at 35.65, -0.3% on volume
of 126.2 million vs. 92.3 million average. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) was -0.7%
and closed at 1995, back to the 89-day EMA where it was on 02/24 with a 1991
low. The current 89-day EMA is 2000, which is also the trading range support
we mentioned yesterday, which is now resistance. Yesterday’s low was 1993. All
of the primary sectors finished red, except for the SMH.
| size=2> | Wednesday
3/3 |
Thursday
3/4 |
Friday
3/5 |
Monday
3/8 |
Tuesday
3/9 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High | 1152.44 | 1154.97 | 1163.23 | 1156.86 | 1147.32 |
| color=#0000ff>Low | 1143.78 | 1149.81 | 1148.71 | 1146.97 | 1136.84 |
| color=#0000ff>Close | 1151.02 | 1154.88 | 1156.86 | 1147.20 | 1140.57 |
| color=#0000ff>% | +0.2 | +0.3 | +0.2 | -0.8 | -0.6 |
| color=#0000ff>Range | 8.7 | 5.2 | 14.5 | 9.9 | 10.5 |
| color=#0000ff>% Range | 83 | 97 | 56 | 2 | 35 |
| color=#0000ff>INDU | 10593 | 10588 | 10596 | 10529 | 10457 |
| color=#0000ff>% | +.02 | -.05 | +.07 | -0.6 | -0.7 |
| color=#0000ff>Nasdaq | 2033 | 2055 | 2048 | 2009 | 1995 |
| color=#0000ff>% | -0.3 | +1.1 | -0.4 | -1.9 | -0.7 |
| color=#0000ff>QQQ | 36.39 | 36.81 | 36.65 | 35.76 | 35.65 |
| color=#0000ff>% | -0.6 | +1.1 | -0.3 | -2.4 | -0.3 |
| color=#0000ff>NYSE | |||||
| color=#0000ff>T. VOL | 1.33 | 1.26 | 1.37 | 1.25 | 1.48 |
| color=#0000ff>U. VOL | 641 | 783 | 819 | 372 | 261 |
| color=#0000ff>D. VOL | 654 | 438 | 538 | 866 | 1.20 |
| color=#0000ff>VR | 49 | 64 | 60 | 28 | 18 |
| color=#0000ff>4 MA | 57 | 58 | 52 | 50 | 42 |
| color=#0000ff>5 RSI | 58 | 66 | 69 | 43 | 32 |
| color=#0000ff>ADV | 1609 | 2035 | 2236 | 1394 | 1237 |
| color=#0000ff>DEC | 1666 | 1237 | 1075 | 1906 | 2070 |
| color=#0000ff>A-D | -57 | +798 | +1161 | -512 | -833 |
| color=#0000ff>4 MA | +584 | +510 | +371 | +347 | +154 |
| color=#0000ff>SECTORS | |||||
| color=#0000ff>SMH | -1.8 | +1.8 | -0.9 | -4.1 | +0.6 |
| color=#0000ff>BKX | +0.6 | -.03 | +1.0 | -0.4 | -0.6 |
| color=#0000ff>XBD | +.02 | +1.1 | +0.6 | -1.6 | -1.6 |
| color=#0000ff>RTH | +0.7 | +0.3 | -.03 | -0.6 | -0.8 |
| color=#0000ff>CYC | -.05 | -.08 | +0.1 | -1.3 | -1.2 |
| color=#0000ff>PPH | +0.2 | +0.4 | +0.2 | -0.2 | -1.3 |
| color=#0000ff>OIH | -0.7 | -0.3 | -0.6 | +0.2 | -1.7 |
| color=#0000ff>BBH | +0.9 | +0.7 | +1.6 | -1.5 | -1.1 |
| color=#0000ff>TLT | -0.2 | +0.4 | +1.9 | +0.6 | +0.6 |
| color=#0000ff>XAU | -.09 | +1.4 | +2.9 | -1.1 | +0.1 |
^next^
For Active
Traders
The early down in the major indices set up
some
good entries in the early oversold techs. There was the RST long in the QQQ
above 35.68 which advanced +0.8% to 35.98, then drifted down and sideways to
the
35.65 close. The SMH had a Trap Door setup on the 10:40 a.m. narrow-range
signal
bar with a very significant increase in volume, in fact, the second-largest
volume bar of the day. The signal bar low was 39.05, right at the lower
channel
line of 39 on the daily chart which was shown in a previous commentary. 39
was
also the 1.414 extension of the leg up from 40.40 to 43.82. The 200-day EMA
is
at 38.
The SMH advanced +1.5% to 39.75 on the 11:30
a.m.
bar from the Trap Door entry of 39.15, and it was +1.8% from the 39.05 low.
It
drifted down on very light volume, and then there was a volume surge in the
last
hour that took it up to a 39.97 high and closed at 39.82.
(
INTC |
Quote |
Chart |
News |
PowerRating) gave you a 1,2,3 lower bottom
with
entry on the reversal of Monday’s 27.62 low, with entry on the 9:40 a.m. bar
yesterday, which ran +1.4% to 28 by 11:40 a.m., then went sideways along
with
the SMHs, but followed by a good increase in volume back up to a 28.10 high
and
27.99 close.
Today’s
Action
The SPX declined below its 20-day EMA, which
was
yesterday’s commentary’s start of the game. The best reversal on the SPX was
off
the intraday low of 1136.84 vs. its 1.28 volatility band at 1136.71, with
the
1135 monthly S2 line just below. The reflex ran to 1141.75, and we start
today
at 1140.58. The first level on the downside would again be 1135 – 1136, so
I’d
look for any kind of setups there on any early weakness. The 1.0 volatility
band
for the SPX today is below that 1132.07.
The AIV for the SPX was 14.28 today vs. 12.56
last week, which moved the 1.0 volatility bands out to 8.5 points today from
7.5
points last week. That same expansion of implied volatility is obviously a
benefit to any long synthetic straddles, in addition to the travel range of
the
price moves.
The 1144 – 1145 level is the first upside
early
test, then the 1146.20 20-day EMA. Most of the pressure will come from
1148 –
1150 today, and then you have the monthly 1152 pivot just above.
The QQQ closed at 35.65, and the first early
upside test is 35.70 and 35.75, then 35.90 – 36.13, and if it’s a really
good
move, 36.34 – 36.63 is where the most pressure is. The downside level is the
same as yesterday, with the 200-day EMA down below at 34.14.
The SMH runs into its first resistance at
40.16 –
40.27, then the 40.71 level. The first downside level is 39.57, and then the
39
lower band.
Have a good trading day,
Kevin Haggerty