Here’s The Positive For This Market
What Friday’s Action Tells
You
It was trend down on Friday after the 10:00
a.m.
ET SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) 1108.32 intraday high on the 10:00 a.m. bar. The SPX
closed at 1095.74, -1.0%, with the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) taking out the 9784
previous key low, closing at 9758, -1.1%. 9784 becomes the immediate upside
focus on any early reflex up. There was a 75 point air pocket down starting
on
the 1:20 p.m. bar into the close, which was 69% of the day’s price decline,
so
it wasn’t heavy selling right from the opening bell.
The agenda in the
(
QQQ |
Quote |
Chart |
News |
PowerRating) was not there on
Friday, as the QQQ closed at 35.80, -2.2%, and back to its 200-day SMA after
hitting a 36.79 high just under the down trendline from 39.
NYSE volume was a bit below the previous
three
days at 1.46 billion shares with the volume ratio 31 and
breadth -905.
The SMH led the sectors down at -3.0%, but
that
follows five straight up days and +7.0%.
The SPX made just a +3 point contra move from
the
.618 retracement zone (five-minute chart), and then it was air pocket down
after
it took out the 1103.08 intraday low at the time. This did not present many
different trading decisions intraday.
Today’s
Action
This is being done Sunday for Monday, but any
initial action starts at the 1100 – 1092 SPX zone, which contains the
200/233-day EMAs and the .618 retracement to 1060.72 from 1142.05. RST
players
should be ready for a second RST entry if the 1094.25 low is taken out. If
the
futures go red on Monday, there can be that air pocket as stops are set off
below the previous 1094.25 low and 12-month EMA at 1093.42.
The positive is that the market has entered
the
key time zone on a -4.2% decline from the 1142.05 high, so traders must be
alert
for the short-term reversal, especially into month-end. The election is next
week, so your guess is as good as mine about the market action until then. I
do
know that there will continue to be erratic price behavior due to
accelerated
program activity. If possible, the October-fiscal-year-end funds will try to
mark their portfolios on the upside.
I favor the QQQs on any reversal if they
retrace
some more this week because of the better relative strength.
The SMH has failed to break above the 89-day
EMA
on two previous attempts, with the first to 32.51 on 10/04 and then last
Thursday at 32.17. The SMH closed at 30.96, just below its 50-day EMA of
30.98
and the initial rising channel line from the 27.78 09/07 low. On continued
weakness this week, the SMH could get to 29.25 – 29.50 quickly. The 89-day
EMA
is now 32.04.
Have a good trading day,
Kevin Haggerty
