Here’s What I See In The SPYs

The
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
traded down to 833.25 by the 10:05 a.m. ET bar,

which was a wide-range reversal bar with
a close above the previous two highs and three closes. That proved to be the
intraday low of the day. There was a 1,2,3 higher bottom entry above the 11:10
a.m. bar high of 837.09, which carried up to 843.40 before reversing and going
sideways until 3:15 p.m. After a quick thee-bar trip down to 833.57, the SPX
closed at 838.15. You had the 1,2,3 higher bottom setups for the
(
SPY |
Quote |
Chart |
News |
PowerRating)
and
(
DIA |
Quote |
Chart |
News |
PowerRating)
, and of course, their futures. The
(
QQQ |
Quote |
Chart |
News |
PowerRating)
s and
(
SMH |
Quote |
Chart |
News |
PowerRating)
s didn’t
give you the same pattern.

NYSE volume was 1.4
billion, a volume ratio of 28, which happens to also be the three-day moving
average. Breadth was -848 for a three-day moving average of -604. These numbers
put you on the short-term oversold side.

Both the DIAs and SPYs
closed within the previous eight days’ closing range. The low of the SPY range
is 84.15, and they closed yesterday at 84.45. The DIAs closed at 79.67, and the
low of the previous eight-day range is 79.14. Both of them made intraday lows
yesterday out of the range. The QQQs have outperformed both the SPYs and DIAs
and closed yesterday at 24.21, right below the head-and-shoulder neckline and
the Dec. 31 low of 24.28. The SMHs hit an intraday low of 20.79 vs. last
Friday’s 20.44 low, and the .786 retracement to the October lows of 20.25. They
closed at 20.98. The neckline is 22, so any quick reflex will be +5.0%.

If we go early green
today, I look to the 60-minute charts for earliest entry patterns, which right
now is a potential RST for the SPY. The SPYs have to make it above their
60-minute 20 EMA to really get going, which is about 84.80. No help is needed
for the continuation short levels after yesterday’s lows and the previous
eight-day trading-range lows.

Today is the futures
trader’s delight, which is the jobs report, and I will look to go long on any
downside quick knife. CNBC is usually our hype leader that sets up the trade.
Any good intraday long setups in the proxies should be taken in this current key
zone because of the upside reflex potential.

Have a good trading day.

Five-minute chart of
Thursday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Thursday’s NYSE TICKS