Incoming
It was a
search-and-destroy mission yesterday. The
only time the incoming stopped was from 12:45 p.m. to 1:35 p.m. It was down and
dirty into the close for both the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) and S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating).
The NDX closed on the lows at 1362, just an opening away from taking out the
April 4 1348.52 low which is now a magnet.Â
Breaking the low sets up
the 1,2,3 lower low discussed in previous texts. The NDX broke the down
trendline from 4147 drawn through the 2772 swingpoint high which preceded the
April low. That is the first requirement for a valid 1,2,3 lower low setup. If
the 1348.52 low is taken out, then we look for entry on a reversal to the upside
of that low.Â
This is a high-reward,
low-risk trade, because the NDX is extremely oversold and also because if the
reversal fails, you can immediately reverse and take the continuation short if
it wants to trade below 1348.53 again. Either way, you will have a good
inflection-point trading opportunity — and I did not say “investment”
opportunity.
The SPX closed at 1106.40 and is within 2.2% of its 1081 magnet low. That’s just
another yesterday away. From the opening bell yesterday, the up volume divided
by the down volume ratio never got better than .30. TRIN was over 2 most of the
day. Decliners led advancers by 1,000 or more from 10:00 a.m. The Nasdaq
finished -3% with an extreme volume ratio at just 12. The NDX 100 lost 3.8%. The
SPX ended -2.2% with over 400 index stocks in the minus column. This
has happened five times since June 14.Â
Let’s quickly review what
followed these big down days, just to make you aware of what happened over the
next few days:
June 14 |
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mso-fareast-font-family:”Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language: |
+ |
+ |
+ |
July 6 |
+ | mso-fareast-font-family:”Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language: EN-US;mso-bidi-language:AR-SA”>— |
mso-fareast-font-family:”Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language: EN-US;mso-bidi-language:AR-SA”>— |
+ | + |
July 24 |
+ | + | + | Â | Â |
August 8 |
+ | + | + | Â | Â |
We start out today at 8:00
a.m. with mostly green in the Semis and some of the NDX 100 dogs. The NYSE still
has 58% of its stocks above the 200-day moving average. The SPX has 44% while
the tech wreck NDX 100 has but 16%. Yesterday being a major fear day, only the
(
$XOI.X |
Quote |
Chart |
News |
PowerRating),
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) and
(
$UTY.X |
Quote |
Chart |
News |
PowerRating) ended green. Also,
(
AMGN |
Quote |
Chart |
News |
PowerRating)
and
(
BGEN |
Quote |
Chart |
News |
PowerRating) gave us an upside trade — the Biotechs often go counter to
fear.
Stocks
Today
Program
|
||
Fair Value
|
Buy
|
Sell
|
1.20
|
 2.20 |
|
For today, take yesterday’s
Semis list and focus on those, along with the
(
$SMH.X |
Quote |
Chart |
News |
PowerRating)s which closed
at 39.91 vs. the .786 level of 39.11.Â
In the Biotechs, the
(
$BBH.X |
Quote |
Chart |
News |
PowerRating)s
closed at 121.40, just below the 121.64 20-day EMA and the 121.79 50-day EMA.
Use the averages as your starting point on the upside.Â
Start with
(
AMGN |
Quote |
Chart |
News |
PowerRating),
(
BGEN |
Quote |
Chart |
News |
PowerRating)
and
(
GILD |
Quote |
Chart |
News |
PowerRating) while you scroll intraday charts for possible setups in
(
IDPH |
Quote |
Chart |
News |
PowerRating)
and
(
GENZ |
Quote |
Chart |
News |
PowerRating).Â
From the NDX dog list, keep
(
BRCD |
Quote |
Chart |
News |
PowerRating) in your plan as it had a narrow-range day on increased volume (which
is a wake-up call) — as did
(
MERQ |
Quote |
Chart |
News |
PowerRating).
Have a good trading day.
Five-minute chart of Thursday’s S&P 500 (SPX) with 8-,
20-, 60-
and 260-EMAs
Â
Five-minute chart of Thursday’s NYSE TICKS