If They Push Tech, Here Are My Choices
What Thursday’s Action Tells
You
It was a “one decision” day for
traders
yesterday, as the program activity and Generals being active expanded the
range
to the upside and more new highs for the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) and Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating), but not the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) and
(
QQQ |
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Chart |
News |
PowerRating)s as of yet.
Remember, many of the big mutual funds are now quasi-index funds, so it’s no
surprise when strength is concentrated in the primary big-cap program
stocks, in
addition to the option expiration activity which is usually the biggest one
of
the four.
NYSE volume expanded to 1.56 billion with a volume
ratio of 86, as it was all one-sided with 1.33 billion up and just 209 million
down. The five-day RSI is 78, while breadth yesterday was very positive at +1616
which indicates the participation beyond the programs. All of the major sectors
advanced, led by the
(
OIH |
Quote |
Chart |
News |
PowerRating) +4.6%.
| size=2> |
Friday
12/12 |
Monday
12/15 |
Tuesday
12/16 |
Wednesday
12/17 |
Thursday
12/18 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High |
1074.76
|
1082.79
|
1075.94
|
1076.54
|
1089.50
|
| color=#0000ff>Low |
1067.64
|
1068
|
1068.04
|
1071.14
|
1076.48
|
| color=#0000ff>Close |
1074.14
|
1068.04
|
1075.13
|
1076.48
|
1089.17
|
| color=#0000ff>% |
+0.3
|
-0.6
|
+0.7
|
+0.1
|
+1.2
|
| color=#0000ff>Range |
7.1
|
14.8
|
7.9
|
5.4
|
13.02
|
| color=#0000ff>% Range |
91
|
0
|
90
|
99
|
97
|
| color=#0000ff>INDU |
10042
|
10023
|
10130
|
10145
|
10248
|
| color=#0000ff>% |
+0.3
|
-0.2
|
+1.1
|
+0.1
|
+1.0
|
| color=#0000ff>Nasdaq |
1949
|
1918
|
1924
|
1921
|
1956
|
| color=#0000ff>% |
+0.3
|
-1.6
|
+0.3
|
-0.1
|
+1.8
|
| color=#0000ff>QQQ |
35.28
|
34.74
|
34.87
|
34.88
|
35.57
|
| color=#0000ff>% |
-0.1
|
-1.4
|
+0.3
|
+0.9
|
+1.9
|
| color=#0000ff>NYSE | |||||
| color=#0000ff>T. VOL |
1.18
|
1.46
|
1.51
|
1.41
|
1.56
|
| color=#0000ff>U. VOL |
754
|
516
|
925
|
752
|
1.33
|
| color=#0000ff>D. VOL |
414
|
928
|
557
|
598
|
209
|
| color=#0000ff>VR |
64
|
36
|
62
|
56
|
86
|
| color=#0000ff>4 MA |
54
|
56
|
62
|
54
|
60
|
| color=#0000ff>5 RSI |
68
|
56
|
64
|
66
|
78
|
| color=#0000ff>ADV |
2142
|
1278
|
1947
|
1924
|
2445
|
| color=#0000ff>DEC |
1134
|
2018
|
1359
|
1302
|
829
|
| color=#0000ff>A-D |
+1008
|
-740
|
+588
|
+622
|
+1616
|
| color=#0000ff>4 MA |
+309
|
+301
|
+635
|
+370
|
+521
|
| color=#0000ff>SECTORS | |||||
| color=#0000ff>SMH |
-0.1
|
-3.1
|
-0.6
|
-0.9
|
+3.6
|
| color=#0000ff>BKX |
+0.1
|
-0.6
|
+1.0
|
-0.2
|
+1.0
|
| color=#0000ff>XBD |
+1.2
|
-1.1
|
+1.0
|
+0.5
|
+1.0
|
| color=#0000ff>RTH |
-0.6
|
-1.8
|
+0.2
|
+1.7
|
+0.8
|
| color=#0000ff>CYC |
+0.6
|
-0.6
|
+0.6
|
+0.6
|
+1.8
|
| color=#0000ff>PPH |
+0.3
|
-0.7
|
+0.5
|
-0.3
|
+1.0
|
| color=#0000ff>OIH |
+2.7
|
-1.8
|
+0.8
|
-0.3
|
+4.6
|
| color=#0000ff>BBH |
+0.9
|
+0.1
|
+0.5
|
+1.7
|
+0.5
|
| color=#0000ff>TLT |
+0.2
|
-0.6
|
+0.5
|
+0.7
|
+0.9
|
| color=#0000ff>XAU |
+0.6
|
+1.1
|
-2.9
|
+1.3
|
-0.7
|
For Active Traders
This corner sold the balance of
(
UCL |
Quote |
Chart |
News |
PowerRating)
+15%,
(
APA |
Quote |
Chart |
News |
PowerRating) +13% and
(
MUR |
Quote |
Chart |
News |
PowerRating) +10%, which is the run they had on the
breakouts
from their flag patterns 11 – 13 days ago. (See Dec. 1 and 3 commentaries.)
They
will probably go higher, but the game is compounding returns for those
without
mutual fund capital, and these returns in that timeframe mean it’s time to
take
some energy exposure off the table and go the rest of the way with a still
100%
position in the XLE sector SPDR which takes much of the company-specific
risk
out of the position. You do remember the weekly chart of the XLE’s
symmetrical
triangle I gave you in mid-October and said, “Put it on your desk and
play the
breakout above 25 if it happens.” It broke out the first week of
December and
closed yesterday at 27.16, +8.6%, from the 25 breakout level.
I have included the XLE daily chart for
definition of the move. The other three stocks accelerated faster because of
the
natural gas move which has gotten extended to almost the 3.0 standard
deviation
zone and the reason to just go with the XLE with tight trailing stops. If
the
other stocks are going to be sector moonshots, there will be more
retracements
to play, and it doesn’t matter whether it’s higher because it would be just
another trade setup, but with the nice cushion from the flag breakout trades
into the December energy bias. It doesn’t count until the trade is booked.
Mark-to-the-market means bumpkis.
In that same early December commentary as the energy
stocks, we saw the early selling by the Generals into the hype in the retail
stocks mentioned, like
(
BBY |
Quote |
Chart |
News |
PowerRating),
(
KSS |
Quote |
Chart |
News |
PowerRating) and
(
DLTR |
Quote |
Chart |
News |
PowerRating). They all went south
after that until a reflex on some volume the past two days.
Traders started out with some opening reversals
yesterday and price never looked back with no threat of getting stopped out.
I have included the ESH4 and SPY charts today which show you the opening reversals
with entry on the 9:45 a.m. ET bar for both derivatives. The E-mini entry was
above 1077.75 and then accelerated on a breakout of the Slim Jim set up pre-9:30
a.m. The SPY broke out above 108.57 on the same 9:45 a.m. bar, then ran to 109.23
and formed a 13-bar Slim Jim before a breakout up to the 109.72 intraday high
and closing at 109.67.
The
(
DIA |
Quote |
Chart |
News |
PowerRating) traded 10.5 million shares yesterday
vs. its 5.3 million average, and the volume spike on the 2:35 p.m. five-minute
bar was by itself just over three million shares. This was obviously major program
action. This type of action and why is explained in the Slim
Jim module and, of course, the seminar
manual.
The SPX is now just above that 1050 – 1075 zone,
while the Dow is above its 10,011 .618 retracement level to the 11,750 high.
The XLB and XLF are at their .786 levels to previous highs. The SPX .50 retracement
to 1553 is 1161, and the .50 retracement to the 1530 secondary high is 1150,
so they are magnets if the 1050 – 1075 zone is held. There are a few other numbers
in that zone also which I have given to you in previous commentary which I will
review going forward.
Today’s
Action
We have just seven trading days left into
year-end, and you can forget Christmas Eve day and the Friday following
Christmas Day, so the year is almost over. The Generals don’t have to push
price
much because just holding these levels will give them an excellent year, but
there will be some of that in their largest holdings, which are the top
market-cap stocks in the SPX. So if you’re around, keep scrolling those
stocks.
I look at it as a 9:30 a.m. – 11:00 a.m. and 2:30 p.m. – 4:00 p.m. day
through
year-end, and then have some fun in between. Looking at the weekly charts,
the
XLK and QQQs are my choices if they try to push technology in to year-end.
They
are just below breakout levels.
Have a good trading day,
Kevin Haggerty
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