Good Preparation Precedes Good Luck
It was a standoff yesterday
as neither buyers nor sellers dominated. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) traded in a
6 point range, churning at the primary confluence. The SPX closed in the bottom
25% of the range with still a marginal higher high, but a higher low of 1065.22,
so I guess the bulls were actually a bit stronger. Narrow-range days with an
increase in volume following a move very often signals a trend change relative
to the move in place, which in this case is the last six days. That is one of
your key volume principles. However, NYSE volume was 1.38 billion yesterday
with a volume ratio of 43, which is neutral, but the four-day MA is still over
60 and now at 64. Breadth was -20, which also indicates a neutral day between
buyers and sellers. Certainly after six up days and no retracement yet to the
1031.20 low on Nov. 21, any intraday short setups in the futures/index proxies
becomes a higher probability, especially into the short-term overbought condition.
| size=2> |
Wednesday
11/26 |
Thursday
11/27 |
Friday
11/28 |
Monday
12/1 |
Tuesday
12/2 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High |
1058.45
|
H
|
1060.63
|
1070.47
|
1071.22
|
| color=#0000ff>Low |
1048.28
|
|
1056.77
|
1058.20
|
1065.22
|
| color=#0000ff>Close |
1058.45
|
O
|
1058.20
|
1070.12
|
1066.62
|
| color=#0000ff>% |
+0.4
|
|
-.02
|
+1.1
|
-0.3
|
| color=#0000ff>Range |
10.2
|
L
|
3.9
|
12.3
|
6
|
| color=#0000ff>% Range |
100
|
|
37
|
97
|
23
|
| color=#0000ff>INDU |
9780
|
I
|
9782
|
9899
|
9854
|
| color=#0000ff>% |
+0.2
|
+0.2
|
+1.2
|
-0.5
|
|
| color=#0000ff>Nasdaq |
1953
|
D
|
1960
|
1990
|
1980
|
| color=#0000ff>% |
+0.5
|
+0.4
|
+1.5
|
-0.5
|
|
| color=#0000ff>QQQ |
35.34
|
A
|
35.34
|
35.90
|
35.69
|
| color=#0000ff>% |
+0.5
|
+0.2
|
+1.5
|
-0.6
|
|
| color=#0000ff>NYSE |
Y
|
||||
| color=#0000ff>T. VOL |
1.10
|
487
|
1.35
|
1.38
|
|
| color=#0000ff>U. VOL |
798
|
280
|
1.08
|
585
|
|
| color=#0000ff>D. VOL |
295
|
193
|
246
|
779
|
|
| color=#0000ff>VR |
73
|
59
|
81
|
43
|
|
| color=#0000ff>4 MA |
72
|
72
|
71
|
64
|
|
| color=#0000ff>5 RSI |
66
|
69
|
92
|
70
|
|
| color=#0000ff>ADV |
2144
|
1848
|
2417
|
1614
|
|
| color=#0000ff>DEC |
1061
|
1207
|
882
|
1634
|
|
| color=#0000ff>A-D |
+1083
|
+641
|
+1535
|
-20
|
|
| color=#0000ff>4 MA |
+1133
|
+1134
|
+1115
|
+810
|
|
| color=#0000ff>SECTORS | |||||
| color=#0000ff>SMH |
+0.2
|
+1.1
|
+0.6
|
-0.7
|
|
| color=#0000ff>BKX |
+0.3
|
-0.1
|
+0.9
|
-0.1
|
|
| color=#0000ff>XBD |
+1.0
|
+0.2
|
+1.2
|
-.08
|
|
| color=#0000ff>RTH |
-0.6
|
+0.3
|
+.06
|
-2.2
|
|
| color=#0000ff>CYC |
+0.6
|
+0.3
|
+1.8
|
-0.4
|
|
| color=#0000ff>PPH |
+.07
|
-0.5
|
+1.6
|
-0.2
|
|
| color=#0000ff>OIH |
+1.0
|
+.02
|
+0.7
|
+1.2
|
|
| color=#0000ff>BBH |
-0.7
|
+0.2
|
+2.1
|
+0.5
|
|
| color=#0000ff>TLT |
-0.4
|
-0.9
|
-0.5
|
+0.4
|
|
| color=#0000ff>XAU |
+2.9
|
+1.8
|
+2.3
|
+.07
|
In the major sectors, the RTH (retail) led the
red team at -2.2%, while the OIH was +1.2% trying to maintain the historical
December up bias for energy, that’s why the flag setups in
(
MUR |
Quote |
Chart |
News |
PowerRating),
(
UCL |
Quote |
Chart |
News |
PowerRating)
and
(
APA |
Quote |
Chart |
News |
PowerRating) went on the focus list, and they are doing well. The SMHs
have been quiet on this current reflex challenging the previous highs. Only
one of the past six days have had a daily range of more than 1 point. I call
it a bevy of dojis. Stay all over them on an intraday basis because wide-range
bars follow narrowing volatility as sure as putting a Democrat in the White
House will send your already high taxes to the moon, which will mean that you
will have to trade must better just to remain the same.
The XLB had a significant volume day
yesterday
(2.4 million) with a narrow-range bar doji close at 25.15 following the
wide-range-bar breakout the previous day on less than 1/3 of yesterday’s
volume.
The is corner wasn’t involved yesterday, so I have not verified the volume,
but
I certainly will be involved from this point, along with
(
PD |
Quote |
Chart |
News |
PowerRating).
(
MSFT |
Quote |
Chart |
News |
PowerRating)
backed off 18 cents yesterday, but that was no problem as
(
GE |
Quote |
Chart |
News |
PowerRating) reversed
the
opening and re-crossed the 50-day EMA of 29.04, trading up to 29.48 and
closing
there, +1.6% on the day, while the SPX had gone -0.3%, closing at 1066.62.
The
Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating), Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) and
(
QQQ |
Quote |
Chart |
News |
PowerRating)s were -0.5%
and -0.6%.
The GE volume of 24.2 million was the most for the past six days and the
most up
volume since the upgrade volume on Nov. 18 and 19. There is a good chance
the
recent 27.37 low retest of the July 26.90 low will hold up into year-end.
Nevertheless, this corner is riding the horse as there was enough profit
cushion
to carry it over to see what up.
I must note that in line with the XLB volume, I
see in today’s S&P 500 screen that
(
NAV |
Quote |
Chart |
News |
PowerRating) ended -1.3% yesterday on over
four times its 829,000 average daily volume, while
(
NUE |
Quote |
Chart |
News |
PowerRating) was -7.1% on three
times its average volume. They’re both smokestack stocks. Also,
(
OMC |
Quote |
Chart |
News |
PowerRating), one
of the focus list stocks, gapped up on 176% more than its average volume for
a +4.9% gain. FYI: The best daytrading setups will be found from the best daily
chart setups, and even better if the weekly charts are in sync. Good preparation
precedes good luck.
Another common price and volume negative thread
yesterday was in the retail sector in stocks like
(
BBY |
Quote |
Chart |
News |
PowerRating),
(
DDS |
Quote |
Chart |
News |
PowerRating),
(
MAY |
Quote |
Chart |
News |
PowerRating),
(
FDO |
Quote |
Chart |
News |
PowerRating),
(
KSS |
Quote |
Chart |
News |
PowerRating) and then
(
DLTR |
Quote |
Chart |
News |
PowerRating) in the NDX 100. When I see that appear
on the screens after a rally, those stocks go right on the scroll list in case
the Generals return to take some more money off the table into this retail shopping
season hype that seems to be building. The focus will be on the higher-priced
retail stocks like KSS with a new closing low and below its weekly moving averages,
along with BBY which has had some run from the October 2002 low of 17 to yesterday’s
62.70 high, closing at 58.52 on a wide-range outside bar on light volume. When
buyers walk away from extended stocks, the initial decline is very often on
light volume. The 20-day EMA is down at 52.18. There wasn’t an empty suit analyst
out there that liked BBY below 20 in October 2002, but the 1,2,3 higher bottom
players had good entry above 25 while the analysts were still hiding under the
table afraid to make a decision. But now that the stock has gone from 17 to
62.70, they have a really good handle on it and are giving you price objectives.
Give me a break. I’ll take a good credit analyst over the Street’s analysts
any time. At least they tell it like it is because they don’t have to kiss —.
The cold weather here in the East must be making
me aggressive this week. Before I sign off, don’t forget to check those index
screens every day, especially the 3-Day
Wake Up Call which gives you a heads up when the Generals show up. This
screen identifies stocks in the SPX and NDX 100 that have closed above the previous
two days’ highs, have the largest daily range for three days, and the most daily
volume of the three days. Elephants can’t hide, and this is a good way to know
they’re coming.
In today’s screen, you see they are trying to
get
(
EDS |
Quote |
Chart |
News |
PowerRating) going, making a new closing high yesterday since Sept. 15
and
above the 200-day EMA and also in a flag pattern on the weekly chart.
Another
thread on today’s 3-Day screen is four banks showing up:
(
BK |
Quote |
Chart |
News |
PowerRating),
(
MEL |
Quote |
Chart |
News |
PowerRating),
(
NTRS |
Quote |
Chart |
News |
PowerRating) and
(
ONE |
Quote |
Chart |
News |
PowerRating). So you now go to your chart screen and check them
out
where you see some gap ups on volume, so they then go on your scrolling
list.
(
MCHP |
Quote |
Chart |
News |
PowerRating) also shows up with a new rally high and that was a recent focus
list
stock on the pullback to the 20-day EMA and is now up 3 points from there.
That
means today I look right to
(
MXIM |
Quote |
Chart |
News |
PowerRating) which has the same pattern. Check it
out.
Time to go. You can’t do it all, but the key
point today is to focus on where you get the most beneficial information to
give
yourself higher-probability trading opportunities.
Have a good trading day,
Kevin Haggerty
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