Expiration, Earnings, Funding

April 16, 2001
Kevin Haggerty

Thursday’s
upside rush preceding the long
weekend extended the outstanding volatility we have had for nine straight days.
The Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) has recorded
-3.6%; -7.8%; -2.0%; +10.7%; -4.6%; +2.3%; +7.9%; +3.1% and +4.1%. It doesn’t
get much better than that for daytraders but it just might with expiration this
week along with the earnings hoopla and tax time.

Thursday was another
classic day for sequence trading in the market SPDRs and I trust that my
seminar attendees had a very profitable day. Both
the NDX and S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating) gave you 1.27 extension moves vs. the first
move up and then 1,2,3 entries that were also above the 8-period moving average
of the highs. The NDX ran 5.6% from entry and 6.8% from the extension bottom.
I will include both charts in Tuesday’s text for
your records.

There were three major
programs on Thursday — one at 12:30 p.m.; one at 3:30 p.m. and one at 3:45 p.m.
— each of which took the index to new intraday highs. Coincidence? Not a
chance. “Premeditated” is the correct terminology, but it is always
welcomed by the daytraders.

I have outlined the
breakout points of each program and, as you can see in the NYSE Ticks chart
below, it is easy to identify these programs. The 12:30 p.m. program started at
-84 ticks and ran to +682 ticks in just three bars, and then back to -72 in the
next three bars. The breakout on
the index was a continuation to new intraday highs.

The second program broke
the SPX out of a Symmetrical Triangle and then new intraday highs, while the
third program was into the close, going from +64 ticks to +777 in two bars. There
was a mix of short-covering preceding the long weekend, real buyers attracted by
rising prices, and strategic program agendas with excellent timing.

Along with MU, I continued
to favor the Equipment Semis based on their action. NVLS
and KLAC are pushing the upside of their three-month bases but we have been here
before — only to see them sell off again.

Semiconductors are the
major key to the Technology sector and, because of their extreme volatility, can
be played both ways for intraday trades. Emotions run high and it is still more
profitable to fade extremes, so be careful with continuation breakouts,
especially with those stocks that had rising prices and a decrease in volume,
like some of the Semis in the past two sessions.

Stocks
Today

(June
Futures)

Fair Value

Buy

Sell

7.00

.
8.70Â

Â 5.25Â

Semis, of course, as I
said, both ways.Â

Have
a good trading day.

Gary
Kaltbaum on TradingMarketsWorld! Gary Kaltbaum will be appearing on the
Intermediate-Term Trading board Thursday, April 19, at 8:00 p.m. ET. Be sure to take
this opportunity to chat with and have your questions answered by a leading
intermediate-term trader. Click
here to take your trading to a new dimension.

Expiration, Earnings, Funding

BUY THE FEAR, SELL THE GREED

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