For The Sequence Trader, No Surprise
What Wednesday’s Action Tells
You
The major indices made a lower high and low
yesterday, as did the
(
SMH |
Quote |
Chart |
News |
PowerRating), which reversed its 200-day EMA of 38.03,
closing at 37.57, -2.9%, giving back over half of the previous two days’
+5.2%
gain. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed down -0.9% at 1131.33, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) at 10,368, -0.6%, the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) at 1991, -1.6%,
and
the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s 36.58, -1.4%.
NYSE volume remains on the low end at 1.27
billion, with yesterday’s volume ratio at 22 and breadth -1619.
In addition to the SMH, the XBD gave
back -2.0%,
while the XAU continued the decline from its retracement to the 200-day EMA
and
was -5.0% yesterday following the -1.6% on Tuesday.
For Active
Traders
The major indices opened down, then made a
two-bar retracement (five-minute chart) on the gap pullback, then resumed
the
direction of the open, and it was trend down all day. As a sequence trader, a
day
like yesterday isn’t a surprise coming from the three-month extended band,
pushed there by the 18-day SPY rally from 108.06 to Tuesday’s 114.92 intraday
high. The volume in the SPY was the most in four days, but was still only
36.8
million, which remains below average.
Today’s
Action
This is the last trading day of the week, and
the
early futures are green, with the S&Ps +4.6 points, Dow +33 and Nasdaq
+6.50.
The SPY closed at 113.79, just above its 120-minute 20 EMA of 113.64, with
the
34 EMA at 113.08, so that is the first downside reference if the futures
reverse
the early green. The initial upside level is 114.10 – .20. For the QQQ, the
early upside lines are 36.70 – 36.80 and 36.30 – 36.40 on the downside. The
QQQ
closed at 36.58. You have the red alert information from
yesterday’s
commentary,
and for those of you who were on my conference call yesterday, remember how
and
when the odds get to be 2:1 in your favor, and it is not at the extended
bands
after an 18-day rally.
Have a good weekend. The next commentary will
be
Tuesday.
Kevin Haggerty
P.S. I’m pleased to announce my
new workshop, Trading with the Generals 2004, will be held at New
York’s Waldorf-Astoria on June 25 – 27. To ensure everyone gets personal
attention, I’m limiting participation to 50 live and 40 live via Internet. If
you want to attend, make sure you reserve your space early.Â
Click here.