Focus List Stocks Still In Play
What Tuesday’s Action Tells
You
The negative divergence between the internals
and
the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)/Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) carried over yesterday with an
air-pocket decline into the close after the good early Trap Door long trades
to
the 10:45 a.m. ET highs. The “90% – 60%” rule was in play once
again (seminar
material). The SPX and Dow were both -0.8% to 1165.36 and 10,406. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), 1974, finished -0.9% with the
(
QQQQ |
Quote |
Chart |
News |
PowerRating) also -0.8% to
36.05.
NYSE volume expanded to 1.76 billion shares with the volume ratio 27 and
breadth
-1132. The XLB (basic materials SPDR) was -2.2%, while the
(
OIH |
Quote |
Chart |
News |
PowerRating)
was -2.7%
and XLE -1.6%. The XBD was also -1.6% and the
(
SMH |
Quote |
Chart |
News |
PowerRating) -1.2%. The banks and
retail were in line with the SPX.
The SPX ticked at 1163.69, taking out the
1163.75
low, closing at 1165.36 on a wide-range bar with an 1179.39 high, which
doesn’t
help traders at all today because of the spread. The
(
SPY |
Quote |
Chart |
News |
PowerRating) traded to an
intraday low of 116.25 which took out the 116.37 magnet low. It closed at
116.53
with an intraday high of 117.90. For
RST traders, we would prefer some more
weakness to the SPY 116 – 115 zone which would create a lower low and high,
therefore setting up a better RST entry. However, that does not preclude you
from playing the zone on a regular trading basis. The
(
DIA |
Quote |
Chart |
News |
PowerRating) didn’t take
out
the 103.62 low, but is in the 104 – 103 zone, hitting a 103.86 intraday low
vs.
the 200-day EMA at 103.94 and 233-day EMA at 103.38. It closed at 104.07.
Both
the SPY and DIA are at good levels for any early April reflex.
Traders had
Trap Doors/1,2,3 Close long
trades in
the QQQQ, SPY and DIA (or futures) with entries at the 10:00 a.m. reversal
time
period after the initial down opening. After those trades were exited, it
was a
continuation down trend below all EMAs (five-minute chart). The first
reversal
opportunity for the major indices came at the -1.0 volatility band levels
into
the 2:30 p.m. period. The reflex went far enough so you could either scratch
the
trade or else take a small loss before price traded to new intraday lows.
From
the focus stocks in
Monday’s commentary, there was a breakout to new highs
for
(
DGX |
Quote |
Chart |
News |
PowerRating) and
(
CLX |
Quote |
Chart |
News |
PowerRating), both with trade-through entries. On the other hand,
there was
(
HCA |
Quote |
Chart |
News |
PowerRating) which was +8.5% on earnings, etc., to 53 at 10:00 a.m.,
but
the bad news was the stock opened in New York at 52.77. On the downside was
(
NCR |
Quote |
Chart |
News |
PowerRating) where the CEO resigned to got to Hewlett-Packard, and the hit was
-17.2% from 37.90 to 31.40.
(
HPQ |
Quote |
Chart |
News |
PowerRating) was +10% at day’s end. The NCR decline
started on the 12:15 p.m. bar
No harm, no foul for daytraders, but not a
good
day for position holders. Tough game.
Have a good trading day,
Kevin Haggerty
P.S. I will be
referring to some charts here:
www.thechartstore.com in the future.