If You Play In The Game Today, Be Aware Of The Lack Of Liquidity

September 3, 2004
Kevin Haggerty

What Thursday’s Action Tells
You

The market action in the major indices did,
in
fact, take place between 9:30 a.m. – 11:00 a.m. ET and 2:00 p.m. – 4:00 p.m.
Nothing like a long narrow three-hour Slim Jim coming into the 2:00 p.m.
time
period and in front of a holiday when liquidity is thin. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed at 1118.31, +1.1%, up from 1108 on the breakout of the 2:00 p.m. Slim
Jim. The program lights lit up on cue.

For Active
Traders

If you did the 9:30 a.m. – 11:00 a.m. and
2:00
p.m. – 4:00 p.m. thing and traded just the index proxies/futures, you caught
the
Slim Jim move from the three-hour narrow pattern.

The focus stocks from yesterday’s commentary
had
some excellent tradable moves.
(
UTX |
Quote |
Chart |
News |
PowerRating), +2.0%, broke out of a similar Slim
Jim
at 2:00 p.m., with the SPX.

(
PX |
Quote |
Chart |
News |
PowerRating), +3.2%, and
(
PCAR |
Quote |
Chart |
News |
PowerRating), +4.0%, were
different stories as we got initial entry early and then continuation
entries.
Looking at the PX chart, you see the initial Slim Jim breakout (also a First
Consolidation Breakout to new Intraday Highs) above 41.12. It broke out
above
41.41 and a second Slim Jim, along with the SPX.

I have included both the daily and
five-minute
charts for PCAR. On the daily chart, you see the six-bar consolidation that
followed the wide-range bar up, and it was just below the 61.75 rally high
and
above all of the 20-, 50- and 200-day EMAs (above-the-line stock). The
five-minute chart gives you the detailed entries. The first was an opening
reversal above the 61.13 previous day’s high (breakout of the daily chart
pattern). This was a wide-range-bar thrust followed by consolidation for six
bars and then a breakout above 61.83 and new daily chart highs which
eventually
hit a 63.75 intraday high, closing at 63.53. (THANKING YOU.)

If you traded both the major indices and
yesterday’s focus stocks, you had an excellent day.

Today’s
Action

If you play in the game today, you are
obviously
aware of the lack of liquidity both ways, so anything goes and price can be
muscled. It is also the first Friday of the month “jobs dance”
again, so that is
another spike possibility.

Today was very successful, so this corner
will
shut it down on Friday. The next commentary will be next Wednesday.

Have a wonderful and safe holiday
weekend.

Kevin Haggerty

P.S. This is being done Thursday night for
Friday.