Easy Read

• November 20, 2001
• Kevin Haggerty

Pre-holiday
trading began in earnest yesterday, as
the major indexes gave us a gap up, then down to new intraday lows, and then the
inevitable afternoon run-up to close at the highs. This pattern has become all
too familiar, but extremely friendly to daytraders as we just ride the train in
the direction it’s going. 

We had good trades in all
of our biotechs yesterday, in addition to the funny money stocks and big-cap
names like
(
CAT |
Quote |
Chart |
News |
PowerRating),
(
IBM |
Quote |
Chart |
News |
PowerRating),
(
DD |
Quote |
Chart |
News |
PowerRating),
(
NOC |
Quote |
Chart |
News |
PowerRating) and
(
UTX |
Quote |
Chart |
News |
PowerRating). In the
afternoon, some of the Generals returned to give us trade-through entry in the
oil service stocks like
(
NBR |
Quote |
Chart |
News |
PowerRating),
(
BJS |
Quote |
Chart |
News |
PowerRating) and
(
SLB |
Quote |
Chart |
News |
PowerRating).

In addition to thanking
the Generals for yesterday, we must also give recognition to the program traders
that accelerate the major indexes almost at will during thin markets. The
resistance level of 1150 for the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) has given us four good
short trades from that zone over the past four days. At the close yesterday, the
(
SPY |
Quote |
Chart |
News |
PowerRating)s broke above the last four days’ range, closing at 115.77 and 1151 on
the SPX.

On the day, the SPX was
+1.1%, the Dow +1.1%, and the NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) +2.2%, as most of the same
stocks thrown away with a vengeance during this bear market are now being bought
back the same way, and of course, helped by some large short covering. Human
nature hasn’t changed, so the game won’t change, which I call the simple essence
of the market. That is your edge if you’re not afraid to use it. 

The
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) took
the day off, as it closed -1.0% on the day, but the biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating)
gave us a +4.2% run. It will be a surprise to me if we don’t get a fast up in
the semis sometime between today and Friday, so they must be front and center on
your screen. The trading plan remains the same: take the intraday long setups as
they present themselves, and sell the index proxies into the resistance with
stops from 1.0% – 3.0% depending on your entry.

Stocks
Today

In the funny money
stocks, we’ll stay on the train until it stops,
(
CIEN |
Quote |
Chart |
News |
PowerRating),
(
MERQ |
Quote |
Chart |
News |
PowerRating),
(
SEBL |
Quote |
Chart |
News |
PowerRating),
(
JNPR |
Quote |
Chart |
News |
PowerRating),
(
BRCD |
Quote |
Chart |
News |
PowerRating) and
(
VRTS |
Quote |
Chart |
News |
PowerRating), like the days of old.
Also,
(
MSFT |
Quote |
Chart |
News |
PowerRating),
(
INTC |
Quote |
Chart |
News |
PowerRating),
(
IBM |
Quote |
Chart |
News |
PowerRating),
(
WMT |
Quote |
Chart |
News |
PowerRating),
(
HD |
Quote |
Chart |
News |
PowerRating) and
(
LOW |
Quote |
Chart |
News |
PowerRating).

In the biotechs, the
(
BBH |
Quote |
Chart |
News |
PowerRating)s,
(
PDLI |
Quote |
Chart |
News |
PowerRating),
(
CEPH |
Quote |
Chart |
News |
PowerRating) and
(
GENZ |
Quote |
Chart |
News |
PowerRating).

Other stocks:
(
AFFX |
Quote |
Chart |
News |
PowerRating),
(
CSC |
Quote |
Chart |
News |
PowerRating),
(
EBAY |
Quote |
Chart |
News |
PowerRating),
(
AL |
Quote |
Chart |
News |
PowerRating),
(
CAT |
Quote |
Chart |
News |
PowerRating),
(
LTR |
Quote |
Chart |
News |
PowerRating) and
(
GS |
Quote |
Chart |
News |
PowerRating).

In the semis, look on the
intraday charts for setups. They don’t set up on the daily charts —
(
MU |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
NVDA |
Quote |
Chart |
News |
PowerRating),
(
GNSS |
Quote |
Chart |
News |
PowerRating),
(
BRKS |
Quote |
Chart |
News |
PowerRating),
(
KLAC |
Quote |
Chart |
News |
PowerRating) and
(
ADI |
Quote |
Chart |
News |
PowerRating).

Have a good trading day.

Five-minute chart of
Monday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Monday’s NYSE TICKS

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