Helping Out With Today’s Trading Plan
The
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) continues to be locked in a 30 point trading range
since the 806.29 low on Feb. 13.
Yesterday the early down hit 819.93, holding the 818.54 swing point low, and
then rallied to 826.38, but was not able to get through 827, so they took it
down again toward that magnet low. But once again the 818.54 low was not taken out,
as the SPX made an 819 intraday low on a doji signal bar which was an RST long
entry above 819.75. This was also a 1,2,3 lower bottom pattern. The trade
carried to 829.33 before making a net plus retracement to 822, then closed up at
829.85, +1.0% on the day. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) gained +0.9%, and the NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) +0.7%. The
(
SMH |
Quote |
Chart |
News |
PowerRating)s had the strongest relative strength all
day and were green right from the opening bell and ended the day +1.9%. Overall
NYSE volume was 1.3 billion, a volume ratio of 61 and breadth +240.
The major capitalization
stocks mentioned yesterday all outperformed the major indices. INTC gained
+2.2%, GE +2.1%, WMT +1.9%, MSFT +1.6% and CSCO +1.3%. Very often when the
market hits chop or is a sideways market stuck in a trading range, it is a time
when you can play different individual stocks by being long and short at the
same time depending on where they are in their trading ranges. You can daytrade
mini baskets both long and short according to their immediate relative strength.
It is important that you take your profits quickly, however, and not expect a
moonshot like you might get in a trending market. There is nothing wrong with
taking singles rather than expecting a homerun all the time while the markets go
sideways being dominated by newsbites. This chop will obviously continue until
we get it done over there.
Yesterday’s advance left
both the Dow and SPX in intraday rising wedges with symmetry, so I am alert for
any short setups in the 830 – 834 zone for the SPX, and then there is the
stronger resistance level above from 839 – 841. For example, 839.60 is the .618
retracement to the recent 852.34 high, while 839.55 is the .618 retracement
between 954.28 and the October low of 768.63. 841 is that familiar natural
square number. We have seen lots of price action around this level.
I watch the major stocks
the same as I do the indices. WMT and GE have the same intraday patterns as the
Dow and SPX, while CSCO is in a 13.83 – 13.65 box. INTC on a pullback to the
16.75 zone might catch some buy interest. MSFT is in a two-day range between
23.50 and 23.05. It traded up to 23.55 yesterday, but closed back into the range
at 23.44, so there’s something to do with MSFT both ways today. The SMHs have
been in a two-day trading range between 22.80 and 22.45. They broke out of that
range yesterday, trading up to 23.04, but came back into the range to 22.65,
then closed at 22.82, so that leaves the SMHs at a tradable level either way.
Thanks for helping me out with today’s trading plan.
Have a good trading day.
Five-minute chart of
Wednesday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Wednesday’s NYSE TICKS