In Like A Lamb, Down Like A Lion

March 21, 2001
Kevin Haggerty

The
hourglass was once again turned upside down post-Greenspan. Total volume was 1.2 billion shares; a volume ratio of just 28;
declines over advances by 458; downside volume bolstered by real selling and
relentless sell programs which obviously accelerates the move — total 882 million
flip-flopping with the positive 870 million the previous day.

Regardless of what
Greenspan did yesterday, the futures were going to run whichever way he went.
Yesterday was a quick down, quick up to new intraday highs, then a knife down to
new daily lows for both the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) and S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating). The
S&P futures sold off to an 1145 low by 5:30 p.m. EST, then edged up into an
excellent Slim Jim. It broke out of that above 1149 just before 1 a.m. EST.Â

This Globex seems to get
interesting at that time more often than not. The breakout carried to an 1158.50
high and when I walked in this morning at 6:00 a.m., it had come back to the
1150 level. I might have to start
setting the alarm clock to participate in the game!

Yesterday’s pre-Greenspan
was a good one to sit out, as stocks just vacillated both ways with no
conviction. It was hard to see who was in the lead, banging the bids after the
announcement. It was crowded with
the OTC market makers who can still sell short on minus ticks, program traders,
and a deluge of married put players in the Techs and Chosen Ones.

Large institutions have to give up too
much price to get anything meaningful done in that kind of tape, so they sell
futures instead. This, of course, leads to lower premiums between the cash and
futures, which brings in the sell programs and the panic is accelerated.

The trading plan today is easy because
of the emotion involved. Trap Doors and Volatility Bands on the long side, and
probably second-entry shorts below yesterday’s lows if they set up after any
early contra move. If for any
reason they open quiet — and that is less likely — and then advance, we should
be looking for retracement shorts at the intraday EMAs andÂ especially
if it coincides with the 20-, 50- or 200-day EMA on the daily charts.

(June
Futures)

Fair Value

Buy

Sell

11.25

.12.75

9.20

Pattern
Setups

If you
only want to focus on the market, then look at the QQQs, the SPYs and DIAs, all
of which closed in the bottom of their range on a wide-range outside bar. Again,
you’re probably better off taking second entry shorts on these market vehicles.

Have
a good trading day.

In Like A Lamb, Down Like A Lion

BUY THE FEAR, SELL THE GREED

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