Follow The Music
We had a
good day yesterday with the semis
and energies carrying over their strength from Friday.
(
MU |
Quote |
Chart |
News |
PowerRating) advanced +8%,
(
NVLS |
Quote |
Chart |
News |
PowerRating)
+7.5% and
(
TER |
Quote |
Chart |
News |
PowerRating) +9.9% to lead the group. The problem with the semis was the
gap openings as we only got trade-through entry in
(
TER |
Quote |
Chart |
News |
PowerRating). NVLS and MU closed
in Slim Jims, so start there for early entry long or short, while
(
KLAC |
Quote |
Chart |
News |
PowerRating)‘s
closing range was 41 15/16 to 41.25. TER closed in a loose four-hour Slim Jim
between 36.0 and 35.70, so there’s no mystery there.
In the energies,
(
APA |
Quote |
Chart |
News |
PowerRating)
gapped on us, but we got good entry in
(
APC |
Quote |
Chart |
News |
PowerRating),
(
HAL |
Quote |
Chart |
News |
PowerRating),
(
NE |
Quote |
Chart |
News |
PowerRating) and
(
RIG |
Quote |
Chart |
News |
PowerRating),
along with a moon shot with
(
FLR |
Quote |
Chart |
News |
PowerRating), which had given us a heads up on Friday
with volume and thrust and then followed through yesterday with a 15% advance.
Entry for yesterday was above the 40.50 Friday high. FLR opened at 41, traded
down to 40.20, then reversed the 40.50 Friday high for entry and also was an
Opening Reversal above 41. Then we got lucky with the extent of the move.
However, you have to be there to get lucky!
While the debaters
discussed the major averages, the good traders keep finding the directional
moves both long and short. The Generals are always doing something. We got a new
high breakout in
(
CEFT |
Quote |
Chart |
News |
PowerRating) on Friday with continuation yesterday and then FLR
yesterday, so obviously some stocks are in a major bull market and there is
plenty of long-side opportunity in addition to the obvious continuation shorts
in the downtrend in the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) and S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating).Â
Each major index or average
is doing its own dance, as the NDX has declined 61.8% to the .786 level, the SPX
declined 21.8% from 1553 to the 1215 low and just at the 1208 .618 zone, while
the Dow has declined 15.3% from 11,401 to the October low of 9,655 and is now
locked in a four-month trading range.
The reason the Dow has
advanced since October is because the basics, defined by the XLBs which are the
basic SPDRs, have advanced +30% from the 10/18 low at the same time as the NDX
has declined -44% from 3404 on the same date. The XLBs had an RST buy entry at
the lows. It’s no different from the XLFs, which are the financial SPDRs which
had a RST buy entry in March of last year that saw them advance +57% to the 1/1
high of 30.66. All the while, the NDX and SPX were tanking. The XLEs or the
energy SPDRs advanced +41% during the same time frame, not to mention the huge
semi move where many of them advanced +75%-125%.Â
There is always something
that is moving, so do the work and you can play both long and short. Forget
about the “market” they all keep talking about with endless gibberish,
and follow the money because there are numerous markets within the major
averages. The XLBs had a continuation move yesterday and closed above the 12/28
high so these stocks can provide some more daily action.
|
(March
|
||
|
Fair Value
|
Buy
|
Sell
|
|
2.00
|
3.40Â |
 .60Â
|
Pattern
Setups
If you get stocks that have
advanced, declined and closed in the top or bottom of the range on one day, make
sure they are in your plan the next day in case you get continuation moves. I
don’t like to carry over too many names unless there is reason, but that is just
to give you more ideas for the day and it doesn’t mean you won’t get more
continuation in the previous day’s names that closed up.Â
Specific
stocks: In the semis,
(
AMAT |
Quote |
Chart |
News |
PowerRating),
(
MU |
Quote |
Chart |
News |
PowerRating) (on a recross of the 50-day EMA), TER
out of the Slim Jim, NVLS,
(
MCHP |
Quote |
Chart |
News |
PowerRating) and
(
INTC |
Quote |
Chart |
News |
PowerRating). Also
(
FISV |
Quote |
Chart |
News |
PowerRating) and
(
SNPS |
Quote |
Chart |
News |
PowerRating).
In the diversified machinery and basics, they all showed up on our screens this
morning: Look at
(
IR |
Quote |
Chart |
News |
PowerRating),
(
CUM |
Quote |
Chart |
News |
PowerRating),
(
CDE |
Quote |
Chart |
News |
PowerRating) and
(
TKR |
Quote |
Chart |
News |
PowerRating). In the papers,
look at
(
GP |
Quote |
Chart |
News |
PowerRating) and
(
IP |
Quote |
Chart |
News |
PowerRating). In the metals look at
(
AA |
Quote |
Chart |
News |
PowerRating). Also in the aero/defense
look at
(
BA |
Quote |
Chart |
News |
PowerRating) and
(
ROK |
Quote |
Chart |
News |
PowerRating). In the energies, stay with
(
APA |
Quote |
Chart |
News |
PowerRating),
(
HAL |
Quote |
Chart |
News |
PowerRating),
(
SLB |
Quote |
Chart |
News |
PowerRating),
(
DO |
Quote |
Chart |
News |
PowerRating), and
(
CAM |
Quote |
Chart |
News |
PowerRating). There must be a reason the Generals have
bought the basics up and are buying the diversified machinery — I think they’re
telling us something. Listen to the music.Â
 Have a good trading
day.
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