Four Key Price Zones Gave Excellent Gains
What Monday’s Action Tells
You
The market action was good yesterday as the
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) opened up and the
(
SPY |
Quote |
Chart |
News |
PowerRating) opened at 119.76 vs. Friday’s
119.33
high rally close. The 90% – 60% rule was in effect with the initial contra
move
down to 119.38 before resuming the direction of the open to close at 120.37
and
new highs.
NYSE volume was 1.43 billion, the volume
ratio 74
and breadth +1273. The up volume/down volume ratio was strong all day. The
cyclicals led the primary sectors at + 1.7% vs. the SPX 1198.69 close,
+0.9%.
The
(
OIH |
Quote |
Chart |
News |
PowerRating) also went green at +1.4%. Both the SPX and Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating),
10,638, were stronger than the remaining sectors, while the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), 2149, and
(
QQQQ |
Quote |
Chart |
News |
PowerRating) were about the same at +1.0% and
+0.9%.
The XAU which, next to the CRB, was the most
oversold last week, gained1.5%.
(
NEM |
Quote |
Chart |
News |
PowerRating) provided traders opportunity
yesterday
making a +2.2% move and remains a focus again today along with some other
gold
stocks with good daily chart setups, in addition to the energy stocks.
The
(
SMH |
Quote |
Chart |
News |
PowerRating) closed at 32.58, up from the
31.89
low last week, but the initial downside focus this week remains 32.46 which
is
the double top low.
(
INTC |
Quote |
Chart |
News |
PowerRating), the major stock in the SMH, closed at
22.63,
and its corresponding low to the SMH is 22.35. The euphoria for the INTC
conference call didn’t even last a full day. Seven days ago, INTC closed at
22.71, then opened the next day at 24.44, closing at 23.91. Yesterday it
made a
22.44 low, so who says it isn’t a game? 21.75 – 21.80 is a preferred buy
level,
and for the SMH that would be 30.50 – 31.
The SPX gave traders trade-through entry
yesterday following the SPX gap opening and contra move to 1190, then a
re-cross
of the high rally close at 1191.37. It was a good trade using futures or the
SPY
into the 1198.68 SPX close.
Going in, we knew this was a time week, so
volatility was expected. Downside retracement levels were raised a bit after
yesterday’s SPX new high and close.
There have been four key price zones that we
have
taken advantage of in the SPX, and the gains from those different zones to
1198.68 are +13%, +10%, +4.6% and +3.2% from the last buy level, which was
1161.
If you utilize option strategies, you might have already made “free
trades” out
of the first two entries that are +13% and +10%.
We have yet to get the retracement to take a
short-term year-end mark-up position. The SPX hit 1173.76 last week
intraday,
but closed at 1189.24 the same day, so nothing done.
Any initial SPX long trades today would be a
retracement back to the 1190 – 1192 level.
Have a good trading day,
Kevin Haggerty
