Lock ‘n’ Load

• December 20, 2001
• Kevin Haggerty

The
pre-opening early red in the S&P futures
(
SPH2 |
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7-and-change, turned out to be the fleecing of the lambs once again. By the
fourth bar, you got the Trap Door setup for the SPX
(
$SPX.X |
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1134.75 low right at the breakout zone from Monday. This support held, and the
SPX rallied to 1152 by the 11:45 a.m. bar. The equivalent high for the
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was 115.82. The .618 retracement to the 118 Dec. 5 high from the 112 low on Dec.
13 is 115.71. Any short at that level only made it to 115.11, which was the
intraday .38 level. It went sideways, bumping up against the .618 level for the
remainder of the session, closing at 115.75.

If you watched your NYSE
ticks closely, you saw all of the programs. NYSE volume was program-inflated at
1.457 billion, a volume ratio of 58, and breadth -140. The up/down volume ratio
never really got much better than 1.3:1, so all day it was the programs keeping
the SPX up. The NDX 100
(
$NDX.X |
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-1.8%. Not all bad, seeing that the
(
$SOX.X |
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After three days up, and
then
(
MU |
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(
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didn’t preclude us from getting over 1 point from entry in
(
BRKS |
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had positive moves in
(
GS |
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(
AGE |
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(
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(
DO |
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(
APC |
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(
CVX |
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(
SLB |
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(
EMLX |
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1/4 points from entry and sets up again today for a possible continuation entry.
GS ran +3.6 points from entry, and it was from a basic eight-day pullback to a
rising 20-day EMA. That is the third successive pullback pattern to a rising
20-day EMA for GS. It’s not rocket science to put yourself in the way of a good
setup and then have the Generals carry  it up.

We continue to be program
pawns the next two days for Triple Witch option expiration, but if you learn to
dance with them, you will do okay.

Stocks
Today

Look at
(
EMLX |
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(
ADP |
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(
JWN |
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(
STJ |
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(
EDS |
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(
FDC |
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which have been VERY good to us — as I said, focus on them through year-end —
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MSFT |
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(
MMM |
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(
IBM |
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in a row,
(
TYC |
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(
CAT |
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Also, look at
(
KSS |
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(
COST |
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(
WMT |
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(
JNJ |
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In the financials, looks
like they tried to start to push them yesterday,
(
BAC |
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(
C |
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(
FRE |
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In the brokers, focus on
(
AGE |
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(
GS |
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(
SCH |
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In the energies, you must
prepare your Middle East plan every day with what’s going on, look at
(
BJS |
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(
RIG |
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(
NE |
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(
SLB |
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In the biotechs,
(
BGEN |
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(
MYGN |
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(
GENZ |
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In the semis, where most
of them finished in the bottom of the range on an increase in volume, but if
they do turn green at any time today, look at
(
BRKS |
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(
ADI |
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re-cross of its 200-day EMA. 

Have a good trading day.

Five-minute chart of
Wednesday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Wednesday’s NYSE TICKS