Focus On Price Action
The
market continues to deteriorate, albeit at a
snail’s pace. Yesterday’s sell-off was rather orderly and lacked any real
panic. The afternoon saw some brief buying at the close around 1081. As noted in
yesterday’s piece, IBM and the the banks,
Bank of America
(
BAC |
Quote |
Chart |
News |
PowerRating)) and
Citibank
(
C |
Quote |
Chart |
News |
PowerRating) offered the best trades
throughout the day, as nervous investors came to grips with a breach of some
technical levels and the heightened scrutiny of the bookkeeping.
It is hard to imagine the market
managing much of a rally until the banks begin to firm. As the chart below
shows, we should have our answer in the next few sessions. The other stock I
came across which may set the tone in the ever-volatile chip sector is
Intel
(
INTC |
Quote |
Chart |
News |
PowerRating), its daily chart will
offer some great setups in the days to come on both long term and intraday
plays.
Turning to the action intraday, I found
some good setups intraday, unlike last week, however, one needed to focus rather
intently on the price action. Yes, there were several technical setups, but when
combined with some good tape-reading skills, it made a noticeable difference on
your entry and exit points. Anticipation rather than
reaction was the operative phrase yesterday. I expect that to be the
case until this support level in the S&Ps is either broken or the market begins
a new leg to the upside. There are just too many players fighting it out right
now to get numerous and decisive setups intraday.
I trust most of you took advantage of
the nice moves in C and
BAC yesterday, both stocks offered great
follow through on the breakdown in their hourly charts. (Refer to yesterday’s
column.)
**Â Keep an eye on J
P Morgan, for those of you who are short it, it is testing its’ 9/11 lows.
Key Technical
Numbers:
S&Ps  |
Nasdaq |
| 1122-23 (confluence)Â | 1452 |
| 1108-10Â | 1433-37 |
| 1104.5 | 1425 |
| 1099Â | 1412 |
| 1091Â | 1400 |
| 1085 (critical)Â Â | 1373-75 |
| 1077-81 | 1364 (critical support) |
| 1075Â Â Â | 1352 |
| 1061 (critical support) | 1330-34 |
| 1054Â Â Â | Â |
| 1037 | Â |
As always, feel free to send me your
comments and questions. See you in TradersWire.
 ***
A few days ago, a reader by the name of Steve Bell contacted me. If you see
this, Mr. Bell, can you please email me at
davef@tradingmarkets.com
and provide me with your contact information. ***
Â