Levels I’m Watching In the QQQs

March 7, 2003
Kevin Haggerty

The
818.54 magnet low has surprisingly repelled five moves at it over the past two
trading days between 819 and
820.70, and each time resulting in a quick bounce. The best trade on Wednesday
was the RST from the 11:00 a.m. ET doji signal bar with entry above 819.75 which
carried up to 829.33 before fading. This is utilizing the five-minute charts.

On the five-minute chart
there is a two-day triple top around that 829.50 zone and the same on the
downside around the 820 level. That range will certainly be resolved shortly and
probably today. I was surprised the Program Gang didn’t take out the 818.54 low
yesterday because it wouldn’t have taken much to spook out the crowd and
accelerate the downside. NYSE volume yesterday was 1.3 billion, a volume ratio
of 33, and breadth -822.

The type of trading
recently is evident by the narrow 1.07 point daily range for the
(
SPY |
Quote |
Chart |
News |
PowerRating)
yesterday, which followed up a .82 range day on Wednesday. If you don’t get the
best move or two of the day, you don’t have much left.

The early down yesterday
put some of those stocks mentioned the previous day at the bottom of their range
and gave you the same bounce as the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating), but they all came back
down. As for the pending war or resolution, I have put on synthetic straddles
into this current upside reflex. That way the market makes the decision for me,
as it should be. My only decision was that there will be volatility, nothing
more cerebral than that.

I have included a chart
for the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s in today’s commentary, which frames it to lower levels. The
QQQs are trading in a parallel line pattern contained now between 23 and 26,
with the longer-term moving averages just above 26. The QQQs bounced off the
.618 retracement to the 19.76 low on this last rally. If they are to move to the
.786 zone on the downside, you should be aware of the level. This second leg
down will equal the first leg down to the 24.28 low at 22.96. The 1.618 Fib
extension of the rally to 27.47 is 22.30. The .707 retracement to 19.76 is
22.41, so this is a confluence zone to be ready for. The .786 retracement is
21.69. Both the SPX and Dow have already hit their .786 numbers.

The entire country will
be watching the United Nations today, so I have no interest in getting involved
unless there are some really good setups, like blowing out the 818.54 low,
setting up a good volatility band trade, which might be a Trap Door, 1,2,3 or an
RST.

Have a good trading day,
have a great weekend, and stay safe.