Focus List Moonshot

  • March 2, 2004
  • Kevin Haggerty

What Monday’s Action Tells
You

The major indices made a news move yesterday, with
both the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) at 1155.97 and Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) at 10,678 both
up about 1.0%. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed at 2058, +1.4%, and +3.3% off
the retracement to the 89-day EMA, which was 1992 at the time. The SPX is pushing
up against the high daily close for this rally of 1157.46. The high weekly close
so far is 1145.81 and low 1131.13. We have been in this zone for seven weeks
now. The Nasdaq is still 5% below its rally high of 2154, as is the
(
QQQ |
Quote |
Chart |
News |
PowerRating),
which closed yesterday at 37.03, +1.3%.

NYSE volume was 1.45 billion yesterday, with
1.17
billion up and just 259 million down for a volume ratio of 82, and breadth
was
also positive at +1717. You can see these short-term oversold and overbought
conditions develop by using the table. Last Monday and Tuesday at the 1137
and
1134 lows, the 4 MA of the volume ratio was 32 and 34, while the 4 MA of
advances minus declines was -858 and -678. Price has now rolled back up to
the
top of the range, and the 4 MA of the volume ratio on Friday was 60 with the
1152 high and 69 yesterday with the 1157.45 high. The 4 MA of advances minus
declines went +1094 and +1717 yesterday. Staying in sync with these numbers
has
enabled you to be more aggressive off the low end of this seven-week trading
range and to lighten up and play the intraday short side at the
top.

The seven-week range is at the .50
retracement to
the 1553 and 1530 SPX highs, in addition to some other significant
confluence.
The .618 retracement zone is about 8.0% above at the 1254 level.

In the primary sectors, energy popped again,
with
the
(
OIH |
Quote |
Chart |
News |
PowerRating) +2.8%,
(
SMH |
Quote |
Chart |
News |
PowerRating) +2.3% with a zero
(
INTC |
Quote |
Chart |
News |
PowerRating) effect which
was
+1.7% after the downgrade. The SMH volume was just around average. The CYC
was
+1.6%, while the basic industry SPDR, which is the XLB, made new rally
highs,
closing at 27.28. The best buy opportunities will continue to be the
retracements in this uptrend, not buying announcements, etc.

With the sector rotation that continues to get
shorter and shorter as money managers, especially hedge funds, try to generate
some performance numbers, there have been many ample long setups on retracements
to rising 20- and 50-day EMAs in confluence with sequence zones.








































size=2> Tuesday

2/24

 Wednesday

2/25

 Thursday

2/26

Friday

2/27

 Monday

3/1
color=#0000ff>Index
color=#0000ff>SPX
color=#0000ff>High 1144.54 1145.24 1147.23 1151.68 1157.45
color=#0000ff>Low 1134.43 1138.71 1138.62 1141.80 1144.95
color=#0000ff>Close 1139.10 1143.67 1144.91 1144.90 1155.97
color=#0000ff>% -0.2 +0.4 +0.1 0 +1.0
color=#0000ff>Range 10.1 6.5 8.6 9.9 12.5
color=#0000ff>% Range 46 76 73 31 88
color=#0000ff>INDU 10566 10601 10580 10584 10678
color=#0000ff>% -0.4 +0.3 -0.2 +.04 +0.9
color=#0000ff>Nasdaq 2005 2023 2033 2030 2058
color=#0000ff>% -0.1 +0.9 +0.5 -0.1 +1.4
color=#0000ff>QQQ 36.36 36.59 36.68 36.60 37.03
color=#0000ff>% -0.2 +0.6 +0.3 -0.2 +1.3
color=#0000ff>NYSE
color=#0000ff>T. VOL 1.52 1.35 1.37 1.50 1.45
color=#0000ff>U. VOL 624 947 888 888 1.17
color=#0000ff>D. VOL 875 381 468 597 259
color=#0000ff>VR 42 71 65 60 82
color=#0000ff>4 MA 34 43 52 60 69
color=#0000ff>5 RSI 36 49 52 52 74
color=#0000ff>ADV 1654 2187 2071 2185 2508
color=#0000ff>DEC 1650 1084 1209 1091 791
color=#0000ff>A-D +4 +1103 +862 +1094 +1717
color=#0000ff>4 MA -678 -188 +264 +766 +1194
color=#0000ff>SECTORS
color=#0000ff>SMH +0.5 +1.8 +0.5 -1.8 +2.3
color=#0000ff>BKX -0.1 +0.5 +0.2 +0.5 +0.5
color=#0000ff>XBD -1.2 +1.7 +0.4 +0.3 +0.9
color=#0000ff>RTH -0.1 +0.9 +0.2 +0.2 +1.0
color=#0000ff>CYC -0.3 +0.7 +0.5 +0.6 +1.6
color=#0000ff>PPH +0.5 -0.2 -.06 -0.4 +0.3
color=#0000ff>OIH +1.5 +0.3 +1.0 +.03 +2.8
color=#0000ff>BBH -0.3 +0.9 +2.5 +1.2 +0.2
color=#0000ff>TLT +0.2 +0.9 -0.4 +0.9 -.05
color=#0000ff>XAU +3.0 -1.1 +0.7 +0.7 +1.1

table
legend

^next^

For Active
Traders

Needless to say, it was an outstanding day if
you
were working the focus list from the past few days. We caught the energies
with
trade-through entries led by
(
MUR |
Quote |
Chart |
News |
PowerRating), +3.2%,
(
SLB |
Quote |
Chart |
News |
PowerRating), +3.1%, and
(
BJS |
Quote |
Chart |
News |
PowerRating),
+3.0%. The others were all above 2.0%, led by
(
NE |
Quote |
Chart |
News |
PowerRating), +2.7%. Some of the
non-energy stocks on the list had big days with good entry, such as
(
CDWC |
Quote |
Chart |
News |
PowerRating),
+7.1%,
(
APOL |
Quote |
Chart |
News |
PowerRating), +4.4%,
(
LAMR |
Quote |
Chart |
News |
PowerRating), +3.1%, with
(
SYMC |
Quote |
Chart |
News |
PowerRating) and
(
STJ |
Quote |
Chart |
News |
PowerRating)
each +2.5%.
(
COP |
Quote |
Chart |
News |
PowerRating) was +2.6%, but there was no trade-through entry
because of
the gap.

The major indices gapped yesterday on the
open,
with the SPX trading up to 1152.60, setting up an RST sell in either the
(
SPY |
Quote |
Chart |
News |
PowerRating) or futures. The contra move was a gap pullback to the 60 EMA with
the
SPY hitting a 115.28 low, down from the 115.83 10:05 a.m. ET high. Price
resumed
the direction of the open, trading up to a 116.34 high, closing at 116.16
vs.
the high rally close of 116.17.

Today’s
Action

Rest on yesterday’s laurels and watch the
action
if they break the SPX to new highs on what will be the fifth day of higher
highs, if that, in fact, happens, and only play long on the focus lists
stocks
on intraday retracement setups, if at all. Short setups in the SPX will be
taken
if there is any emotional early up to new highs.

Have a good trading day,

Kevin Haggerty

P.S. You can finally learn
what traders have been asking me to teach them for years—