Good Things Happen To ‘Above The Line’ Stocks
The SPX and Dow had a
continuation day above their 20- and
50-day EMAs as the SPX hit an intraday high of 1190.39, closing at 1189.40,
+0.7%, with the Dow, 10,552, +0.6%. Volume in both the SPY and DIA has declined
the past two days. The QQQQ underperformed on a relative basis at +0.3% to
37.52, with the lowest volume since 12/21–not a good thing. The Nasdaq was also
+0.3% at 2069, and is still below initial resistance as is the QQQQ.
NYSE increased some to 1.71 billion shares, with
a volume ratio of 70 and breadth +1247, both less than Monday’s numbers despite
the SPX price gain.
The reflex from our SPX price zone at 1161-1163
started on 1/24 with the 4 MA of the volume ratio at 30 and 4 MA of breadth at
-696. Those numbers have now reversed to 62 and +822. Those of you who follow
the dynamics on a daily basis have a good feel for these short-term fluctuations
and the obvious opportunity that accompanies them. The short-term position
decision was made in the price zone when most were negative and afraid to pull
the trigger. Now, it is just trailing stops for the short-term trader who
understands what high-probability price zone entry is all about.
The SPX traders had it easy yesterday on the 1183
breakout on the 10:30 AM bar. 1190-1191 was the next price level and price hit
that 1190.39 high vs. the 1.5 volatility band at 1191.20.
There were certainly many good trade-through
entries in
Inner Circle Focus List stocks. Although the OIH was flat on the day, we got
a continuation trade in Sunoco
(
SUN |
Quote |
Chart |
News |
PowerRating) to new highs, which followed
Monday’s trade, and it was 2.6% from entry. ExxonMobil
(
XOM |
Quote |
Chart |
News |
PowerRating) gave you
the same trade to new highs and +2.5% from entry. Valero
(
VLO |
Quote |
Chart |
News |
PowerRating), one
of Monday’s trades, was +9.5%, but it gapped and there was no trade-through
entry. Good things happen to ‘Above the Line’ stocks. QLogic
(
QLGC |
Quote |
Chart |
News |
PowerRating)
was a no-brainer breakout of a contracted volatility pattern to new highs and
+3.5% from entry. The SPX may have had a down January, but daytraders have had a pot of gold in the energy stocks and the rest of
the ‘Above the Line’ list.
The 1180-1183 SPX level becomes the initial
daytrader’s retracement focus today and 1195-1196 the first upside zone.Â
The QQQQ has initial resistance at 37.85, then 38.20
Have a good trading day.
Kevin Haggerty
