Here’s What To Do In This Upper End Of Resistance
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Yesterday
certainly traded like a pre option expiration day, which is this
Friday. Lots of choppiness, spurts
of machine buying and selling, while the $2 brokers just stood around their
posts on the NYSE floor, not working any orders of size and the overall NYSE
floor was very quiet.
The movement in the major
indices was small, as the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was -0.3% closing at 942.30,
the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) -0.5%, Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) -0.1%, and the QQQ
(
QQQ |
Quote |
Chart |
News |
PowerRating)Â
-0.4%, closing at 28.72, right at that six month, 2.0 standard deviation band
again. The SMH closed at 28.25, -1% and the OIH were +2.3% as crude rose. Also,
some internet stocks had some more upside.
NYSE volume seems to be
locked in a zone with 1.38 billion shares yesterday, volume ratio was
nondescript at 49, and breadth was a push at just -38. Didn’t tell us anything.
It was another narrow range day for the SPX at just 8.6 points as the average
implied volatility — which you know as the AIV on the volatility sheets —
remains below 20 and hasn’t been above 20 since April 21.
The
820 Trend Method remains in very positive territory with the weekly, daily,
and 60-minute all in sync as this upper resistance is tested in the major
indices. In spite of the narrow range yesterday, the SPX gave us a trade from
the intraday highs which was clearly defined. Early on, the SPX traded down to
the .38 retracement to the Monday low of 929.30, which was 9:40. It bounced
twice off of 939.74 and 939.36, but didn’t run much and was locked in a range
between 944.20 and 938.36. It broke out of this range on the 11:55 AM bar to an
intraday high of 947.51. This set up a 1,2,3 higher top pattern, which was also
an RST. There was a Kings and Queens short entry below 946.54 which ran down to
the 938.91 intraday low and just above the 240 EMA. The Dow hit right on its 240
EMA. The 2:25 PM bar was a hammer signal bar for a buy-side RST — or, just to
cover your short — with entry above 940.24, but this trade only carried to
942.32 in the last 1 1/2 hours with the SPX closing at 942.30.
If you get any good
intraday short setups in this upper end of resistance, you take them, unless the
dynamics that day are overwhelmingly strong, and yesterday they obviously were
not. When you get retracements to the 240 EMAs you are alert for any buy setups
and should remain that way until the 820 Trend Method goes negative
There is the retail sales
figure this morning, so maybe that will create some of that artificial futures
action that these these economic numbers normally give us, setting up our first
hour reversal strategies
If the program gang has
an active option expiration agenda today, we could see some more travel range
for the major indices.
Have a good trading day.
Kevin Haggerty
PS
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Five-minute chart of
yesterday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
yesterday’s NYSE TICKS