First Hour, Last Hour

Both the
Nasdaq 100

(
NDX |
Quote |
Chart |
News |
PowerRating)

and S&P 500

gave back
about 25% of the previous day’s gains, as the NDX closed at
3225, off 1.7%, and the S&P 500 finished -0.6% at 1421. 


There was an excellent
contra rally in the NDX 100 after the -2% gap-down opening, and then trading
down to the intraday low of 3176.87 just after 10:00 a.m. This was -3.2% below
the previous close of 3282. From that intraday low, the index rallied 4.2% in
just fourteen bars on your five-minute charts to the intraday high of 3311.

It started from an inside-bar reversal
pattern. The rally was complete by about 11:30 a.m., and the NDX then traded
down to about 3193 at 3:00 p.m., before advancing into the close at 3225. 


If it is to challenge
yesterday’s 3311 high, it must complete a 1-2-3 move, trading above the
3235-3240 level on your five-minute charts. Use that as your upside pivot,
assuming there is no gap-up opening. 


It was essentially a
neutral day, as breadth was about even and the volume ratio slightly negative at
46. Total volume was still strong at 1.2 billion.
The
papers and chemicals backed off, as did the banks and brokers.
The
semis ended -3.8%, giving back almost 50% of their 8% two-day gain. The biotechs
ended +2.1% and the energies also popped with the
(
OSX |
Quote |
Chart |
News |
PowerRating)
+5.9%.
The
Internet/dot.com index gave it two days in a row, closing +3.9%, while the
telecomms had an airpocket day, led on the downside by WorldCom
(
WCOM |
Quote |
Chart |
News |
PowerRating)
.


If you missed the hour
rally yesterday, you missed the long side of the day. In the volatile market we
are currently in, the contra rally in the morning and the late-day moves are the
prime-time plays.
It’s the kind of
tape where you take some profits early on part of your positions and follow the
trade with reasonably close stops.


In the OTC stocks, second
entries continued to work the best. 














face=”arial, helvetica”>(December Futures)


Fair
Value


size=2>Buy


size=2>Sell


10.250


11.50

9.10


Pattern
Setups


Stocks today are:


Adobe
(
ADBE |
Quote |
Chart |
News |
PowerRating)
, Brocade
(
BRCD |
Quote |
Chart |
News |
PowerRating)
,
Abgenix
(
ABGX |
Quote |
Chart |
News |
PowerRating)
, Millennium
(
MLNM |
Quote |
Chart |
News |
PowerRating)
, Siebel
(
SEBL |
Quote |
Chart |
News |
PowerRating)
, BEA Systems
(
BEAS |
Quote |
Chart |
News |
PowerRating)
,
General Electric
(
GE |
Quote |
Chart |
News |
PowerRating)
, America Online
(
AOL |
Quote |
Chart |
News |
PowerRating)
, Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating)
,
Novellus
(
NVLS |
Quote |
Chart |
News |
PowerRating)
, and Gemstar
(
GMST |
Quote |
Chart |
News |
PowerRating)
.


Have a good trading day and I’ll talk
to you all on Monday as I’ll be traveling tomorrow and won’t be on.

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