How To Expand Your Selection Of Trades
What Wednesday’s Action Tells You
After thrust comes a narrow-range day, with the
SPX
(
$SPX.X |
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Chart |
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PowerRating) closing at 1048.11, just barely above the previous day’s
close and +0.1% on the day. It was a 6.5 point narrow-range day that finished
close to the top 25% of the range. The Dow
(
$INDU |
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PowerRating) and Nasdaq
(
$COMPQ |
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PowerRating) were +0.2% and +0.3%, while the
(
QQQ |
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PowerRating)s were -0.1%.
The Generals held price well with NYSE volume at
1.52 billion, but the volume ratio did top 60 for the third day in a row at 66
with a four-day moving average just entering the very early short-term
overbought zone at 60. But that can continue that way with October month end and
maybe some new money being put to work the first few days of November. Breadth
was +886 with the four-day moving average now at +678. Price and volume were
better than the major indices showed. Regardless of what it does, the
(
INTC |
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Chart |
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PowerRating) and QQQ positions will be flat going into the weekend after the
three-day reflex. Put it on the books, as you can always take a new position and
a mark-to-the-market doesn’t pay the bills.
Monday 10/27 |
Tuesday 10/28 |
Wednesday 10/29 |
Thursday 10/30 |
Friday 10/31 |
Net |
|
| Index | ||||||
SPX |
||||||
| High | 1037.75 |
1046.79 |
1049.83 |
|||
| Low | 1028.90 |
1031.13 |
1043.35 |
|||
Close |
1031.13 |
1046.79 |
1048.11 |
|||
| % | +.2 | +1.5 | +0.1 | |||
Range |
8.9 | 15.7 | 6.5 | |||
| % Range |
25 | 100 | 73 | |||
| INDU | 9608 | 9748 | 9775 | |||
| % | +0.3 | +1.5 | +0.3 | |||
| NASDAQ | 1883 | 1932 | 1937 | |||
| % | +.9 | +2.6 | +0.2 | |||
| QQQ | 34.25 | 35.38 | 35.32 | |||
| % | +0.2 | +3.4 | -0.1 | |||
| NYSE | ||||||
| T. VOL | 1.35 | 1.62 | 1.52 | |||
| U. VOL | 861 | 1.23 | 988 | |||
| D. VOL | 484 | 390 | 513 | |||
| VR | 64 | 76 | 66 | |||
| 4 MA | 43 | 56 | 60 | |||
| 5 RSI | 39 | 67 | 67 | |||
| ADV | 2168 | 2229 | 2065 | |||
| DEC | 1050 | 1034 | 1179 | |||
| A-D | +1118 | +1195 | +886 | |||
| 4 MA | -186 | +422 | +678 | |||
| SECTORS | ||||||
| SMH | +1.0 | +5.5 | +0.9 | |||
| BKX | -0.4 | +1.0 | +0.5 | |||
| XBD | +1.5 | +2.6 | +0.5 | |||
| RTH | +1.0 | +2.3 | +0.2 | |||
| CYC | +0.7 | +2.0 | +1.0 | |||
| PPH | 0 | +1.0 | -0.7 | |||
| OIH | -0.4 | +0.6 | -1.4 | |||
| BBH | -0.9 | +2.0 | -1.3 | |||
| TLT | -0.2 | +0.5 | -0.9 | |||
| XAU | +0.5 | -0.7 | +1.8 |
In the sectors, you can see that the
(
SMH |
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PowerRating),
XBD and RTH had their third plus day in succession, as did the CYC. Don’t be
jumping all over any new position longs and stick to intraday setups in those
sectors.
For Active Traders
I have included the five-minute charts of
(
CTX |
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Chart |
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PowerRating) and
(
NSM |
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PowerRating) where you see the relationships of price, volume and
pattern. CTX gave you a narrow-range signal bar (3) right at the 60 EMA and a
volume spike (also 3). (It’s incorrectly shown as red by QCharts, but that close
was above the previous close.) Entry was on the following change-in-direction
bar (4) below 96 on another increase in volume. You had three bars of narrowing
range, with the signal bar the most narrow and with a volume increase, so there
was reason to take the trade. After a nice run of over 2 points, CTX formed a
Slim Jim between 98.50 – 98. Trouble was brewing when there was a volume spike
(5) on a narrow-range bar at the top and no breakout. When price came out the
bottom, it was time to exit the trade on the stop. The key point to remember is
that narrow range on increased volume very often precedes a trend change, and
that is something you are always looking for on the SPX as you review the table.
The NSM chart highlights the reward of scrolling
your intraday charts, especially as the semis get marked up. The stock opened at
39.60, then went sideways from about 11:00 a.m. ET to 1:00 p.m. ET for a
two-hour Slim Jim. Volume preceded and confirmed the Slim Jim breakout, as it
did on the second Slim Jim that broke out on the 2:20 p.m. wide-range bar. The
chart you see was completed after the 41 high, but NSM continued up to 41.21
before a small pullback to a 40.98 close. Just keep hitting those arrow buttons
on your computer and make sure you have the right universe of stocks to check, and
you will always find multiple good setups. Scrolling expands your selection of
trades. Don’t sit there and try to force or scalp trades on, say, just the
futures or index proxies, when very often, there are much better setups
available elsewhere.
For Today
There is nothing profound to say or do today, as
you are just trying to catch another ride if they try to push price again and
take out the Oct. 15 1053.79 SPX high on this first attempt after that
retracement to the 50-day EMA. In the absence of overt news, I don’t expect the
Generals will allow them to sell off too much into month’s end. If there is a
quick intraday reflex down to at least, say, the 1.0 volatility band, be alert
for the reversal long setup.
Have a good trading day,
Kevin Haggerty
