Erratic Day Possible

June 30, 2000
Kevin Haggerty

The S&P 500
finished down 12.4 points or
-0.8%, but it was another excellent trading day for those who sit in front of
the screen. There were two distinct trends yesterday, both approximately the
same percentage move. From 9:30 a.m. to 11:30 a.m., the S&P 500 traded down
17 points or 1.2% from 1451.71 to 1434.63, and then rallied 20.5 points or 1.4%
to 1455.14, to make the intraday high about 2:30 p.m. From there, it retraced
.618 of the rally, closing at 1442.40. Key reference points on your five-minute
charts are 1443.61 — the 20-EMA, 1445.17 — the 60-EMA, and 1450.03 — the
260-EMA.Â

As we look forward to next week, you
anticipate the reinvestment of some new monies by the Generals but that is not
always the case, as they might just take positions in the S&P futures until
they can acquire the individual stocks at prices that don’t create too much
market impact and that is the positive side of the utilization of the S&Ps.
The EMAs for the S&P futures today on your five-minute charts are: 1461.59
— the 20-EMA, 1460.28 — the 60-EMA, and 1462.18 — the key 260-EMA. Needless
to say, things are always better when they are trading above all three EMAs.

As of next Wednesday, after the
holiday, I will include in my Commentary every day, a five-minute chart of the
S&P 500, overlaid over a chart of the New York Stock Exchange ticks. The
index chart will have the 20-, 60- and 260-EMAs, and the exact EMA numbers will
be highlighted on the chart. I will leave the charts with no lines drawn on them
so you can do your own work to highlight patterns that develop, such as Slim
Jims, divergences, 1-2-3 bottoms and tops, geometric retracements and anything
else you utilize in your trading. You should run this off every day and keep
them in a file for future reference. It will definitely help you in your market
dynamics and pattern trading. Make sure you jot down some comments on the charts
to remind you of how the market reacted after any economic, Federal Reserve or
Abby Cohen-type remarks. You will be very pleased as you accumulate some of this
daily trading market history and I know it will be be positive for your
trading.Â

I would be remiss if I didn’t give
special mention to Marianne Winfield of the TradingMarkets.com staff, who made
it possible to deliver this to you on a daily basis. Remember, Monday is a
half-day, so trading can be very thin through Monday, but you can oftentimes
catch some excellent moves. Your stops should be very tight because the program
traders can totally dominate price action today and Monday.

Program
Trading Numbers

(September Futures)

Fair
Value

Buy

Sell

18.95

20.15

17.75

Pattern SetupsÂ Â

Have a good trading day and if you’re
going to take a pass on Monday, have a wonderful holiday weekend.

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Erratic Day Possible

BUY THE FEAR, SELL THE GREED

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