Go Nets!
The
first trading day of June started out big red, as
the Dow
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$INDU |
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$SPX.X |
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$COMPX |
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$NDX.X |
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slightly above average at 1.3 billion, a volume ratio of just 12, and breadth
extremely negative at -1449.
As mentioned
yesterday,
the Generals got a chance to scale-down big time in price, as the potential
short-term meltdown started just one and a half hours after the audio was
completed. All sectors were strong red, except the
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$XAU.X |
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+3.3%. The
(
$SOX.X |
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(
$BTK.X |
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-4.4%.
The initial trade in both
the SPX and NDX was a six-bar Flip Top out the top for a long position, then a
pattern failure reversal trade out the bottom of the six-bar range, which was
below 1064.89 for the SPX. This short entry was also below all EMAs, the 8, 20,
60 and 260 on the five-minute chart, and then below the previous day’s low of
1064.66. It’s the exact same trade you have in your seminar book from
California. If you didn’t take it, but saw it, then your problem is not
knowledge. It is as I talked about in the seminar. Most people know it, but
don’t take it. If you didn’t even see it, then you’re not playing the right game
because the Program Gang plays almost all of their games in the S&P 500, so
therefore, the chart must be on your screen, along with the NYSE TICKS.
The previous SPX low of
1048.96 was a magnet yesterday. With a fear tape in progress, they just took out
that low as the attack started on the 3:25 p.m. bar, which carried down to a
1040.68 close. The 1049 low held from 12:00 p.m. to 3:25 p.m. with a few jiggles
up, as the 1.5 volatility band was 1051.88 and the 2.0 band was 1046.80.
The
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take out the previous swing point low of 36.45 yesterday, but will today.
Yesterday’s intraday low was 36.62. The .618 level is 36.05. Taking out the
36.45 low and the 36.05 .618 retracement level sets up a probable RST buy
pattern. Be alert in that 35-34 zone mentioned in yesterday’s text. The SMHs
gave us a trade from the 1.5 volatility band yesterday, with entry above 37.05,
as it ran to 37.70 before topping out.
With the SPX taking out
the 1049 low and closing at 1041, it is also setting up for an RST reversal. The
.618 retracement level is 1033, and there is a strong confluence from 995-975,
which is just another 4% down. If you are taking the intraday entries as they
present themselves on your intraday charts, you will catch any significant move
from the coming reversal zone. If you catch the reversal, play it with the
proxies and forget about the individual stocks because there is too much going
on that doesn’t help your risk management. Between the analysts’ games,
corporations, accounting standards, and micro-dissemination/hype of news by the
media, it is the worst I have seen in my 30 years.
Stocks
Today
Focus on the index
proxies, the
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sure your stops are tight. Be alert for the defined intraday reversal long
patterns because from oversold levels in retracement zones, they can be
dynamite.
Have a good trading day.
Five-minute chart of
Monday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Monday’s NYSE TICKS