Earnings Time

  • July 7, 1999
  • Kevin Haggerty

The S&P 500 and Dow extended their runs, with the S&P topping out at 1405.32 just after 1:00 PM ET (along with the Dow and NASDAQ). The NASDAQ itself had come out strongly yesterday morning, led by the Internet stocks.

The indexes all made negative divergences with the momentum indicators when they topped out around 1:00 PM (save your five-minute charts). Volume was relatively light and breadth was indecisive.

The S&P 500 finished the session at 1388.12 (with a low of 1387.08). The QQQs, which represent the NASDAQ 100, did the same, closing at 116 3/4 with a low of 116 1/8. A close below the lows is, of course, a change in direction; you can enter shorts trades through these lows with stops just above them (see below).

Target Stocks Of The Day  Not many stocks set up after yesterday’s afternoon sell-off, but several that did are: AES Corp. [AES>AES], Apple [AAPL>AAPL], Computer Sciences [CSC>CSC], Interpublic Group [IPG>IPG], Tricon Global Restaurants [YUM>YUM], Network Appliance [NTAP>NTAP], and Cymer Inc. [CYMI>CYMI].

Program Trading Numbers
BuySellFair Value
12.759.0010.85
On the short side, look to short the QQQs [QQQ>QQQ] or the Diamonds [DIA>DIA]–if you’re familiar with them–on a trade through their lows with a stop just above the lows. Look for them to trade through your entry point, then enter on the next move if the first one is a head fake.

Finally, there’s a lot of earnings talk, so make sure you’re aware when earnings are due on any stock you trade.

Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his new series of tutorial articles.