Look To Play First Hour Strategies
What Friday’s Action Tells
You
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed the week at 1108.20
and -0.1% and also -1.08 points on Friday, or -0.1%. This was a two-day reflex
from Wednesday’s 1087.06 low and short-term oversold condition with the 4 MA
of the volume ratio at just 29 and breadth -950. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) was -0.4%
on the week at 10,213, same as the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) and then the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s
at -0.3%, but having advanced +4.6% off the 34 lows.
Fifty percent of the synthetic straddle was
adjusted back to delta neutral on Friday and the other 50% will be done
today
into the early green futures. This is to get ready for the hyped Friday jobs
report which the media has made bigger than life and because of the futures
gaming around it that enables you to capitalize on the
overreactions.
NYSE volume was the lightest of the five days
on
Friday at 1.32 billion for a volume ratio of 56, which is also the 4 MA now.
Breadth was +290, and the 4 MA now +313.
The significant movement for the week was in the
semiconductors, with the
(
SMH |
Quote |
Chart |
News |
PowerRating) +4.2%, and energy, with the
(
OIH |
Quote |
Chart |
News |
PowerRating) declining
-4.0% from an overbought advance off the November 53.67 low to 75.28 high, or
+40%. The SMH had bounced off the 200-day EMA zone, along with other confluence,
as did the QQQs. The
(
TLT |
Quote |
Chart |
News |
PowerRating) short side is now in good condition, closing
at 89.78 on Friday and coming back to the gap between 87.95 – 89.52. The emotion
and hype had taken it up to 91.48.
| size=2>Â | Monday
3/22 | Tuesday
3/23 | Wednesday
3/24 |
Thursday 3/25 | Friday
3/26 | Net |
| color=#0000ff>Index | Â | Â | Â | Â | Â | Â |
| color=#0000ff>SPX | Â | Â | Â | Â | Â | Â |
| color=#0000ff>High | 1109.78 | 1101.52 | 1098.39 | 1110.38 | 1115.27 | 1115.27 |
| color=#0000ff>Low | 1089.49 | 1091.57 | 1087.06 | 1091.33 | 1106.13 | 1091.33 |
| color=#0000ff>Close | 1095.44 | 1093.90 | 1091.32 | 1109.28 | 1108.20 | 1108.20 |
| color=#0000ff>% | -1.3 | -0.1 | -0.2 | +1.6 | -0.1 | -0.1 |
| color=#0000ff>Range | 20.3 | 10 | 11.3 | 19.1 | 9.1 | 23.9 |
| color=#0000ff>% Range | 29 | 23 | 38 | 94 | 23 | 71 |
| color=#0000ff>INDU | 10065 | 10064 | 10048 | 10219 | 10213 | Â |
| color=#0000ff>% | -1.2 | -.01 | -0.2 | +1.7 | -.06 | Â |
| color=#0000ff>Nasdaq | 1910 | 1902 | 1909 | 1967 | 1960 | Â |
| color=#0000ff>% | -1.6 | -0.4 | +0.4 | +3.0 | -0.4 | +1.0 |
| color=#0000ff>QQQ | 34.32 | 34.02 | 34.41 | 35.34 | 35.22 | Â |
| color=#0000ff>% | -1.2 | -0.8 | +1.1 | +2.7 | -0.3 | +1.5 |
| color=#0000ff>NYSE | Â | Â | Â | Â | Â | Â |
| color=#0000ff>T. VOL | 1.45 | 1.44 | 1.50 | 1.48 | 1.32 | 1.44 |
| color=#0000ff>U. VOL | 116 | 737 | 448 | 1.25 | 734 | 657 |
| color=#0000ff>D. VOL | 1.32 | 679 | 1.02 | 215 | 571 | 761 |
| color=#0000ff>VR | 8 | 52 | 31 | 85 | 56 | Â |
| color=#0000ff>4 MA | 39 | 32 | 29 | 44 | 56 | Â |
| color=#0000ff>5 RSI | 26 | 25 | 24 | 52 | 66 | Â |
| color=#0000ff>ADV | 750 | 1866 | 1148 | 2358 | 1789 | 1582 |
| color=#0000ff>DEC | 2557 | 1399 | 2098 | 911 | 1499 | 1233 |
| color=#0000ff>A-D | -1807 | +467 | -950 | +1447 | +290 | -553 |
| color=#0000ff>4 MA | -288 | -613 | -760 | -211 | +313 | Â |
| color=#0000ff>SECTORS | Â | Â | Â | Â | Â | Â |
| color=#0000ff>SMH | -0.7 | -0.2 | +2.0 | +4.0 | -0.9 | +4.2 |
| color=#0000ff>BKX | -1.2 | -.05 | -0.5 | +1.3 | -0.2 | -0.5 |
| color=#0000ff>XBD | -2.4 | -0.1 | -1.3 | +2.5 | +1.4 | +0.1 |
| color=#0000ff>RTH | -1.5 | -0.3 | +0.3 | +2.3 | -0.3 | +0.5 |
| color=#0000ff>CYC | -2.0 | +0.2 | -0.4 | +2.2 | +0.3 | +0.1 |
| color=#0000ff>PPH | -1.0 | +0.6 | -0.8 | +0.7 | +0.1 | +0.5 |
| color=#0000ff>OIH | -1.6 | -1.4 | -3.0 | +0.8 | +1.2 | -4.0 |
| color=#0000ff>BBH | -2.2 | -1.9 | +1.1 | +2.0 | -1.5 | -2.5 |
| color=#0000ff>TLT | +0.6 | +0.2 | -.07 | -0.4 | -1.1 | -1.4 |
| color=#0000ff>XAU | -0.7 | +0.7 | -2.4 | +2.6 | +1.0 | +1.2 |
^next^
For Active Traders
Friday was trend up for the major indices after
the opening until the program-induced decline in the last 45 minutes took out
most all of the day’s gains. The
(
SPY |
Quote |
Chart |
News |
PowerRating)s,
(
DIA |
Quote |
Chart |
News |
PowerRating)s and QQQs all had the
same first-hour strategy, which is the opening reversal, which was the initial
daytrade that carried through with higher highs and higher lows until the air
pocket in the last 45 minutes. The SPX 3:15 p.m. ET air pocket from 1115.22,
was at the .382 retracement zone to the 1163.23 high which is 1116.50.
Today’s
Action
The early futures are green at 6:45 a.m., with
the Dow +42, Nasdaq +8 and the S&Ps +4.50 coming into the last three trading
days of the quarter, in addition to the Friday jobs report. If that is “good,”
the Generals will have every reason to make this quarter positive relative to
the many portfolio managers that now really have just quasi index funds. The
SPX closed 2003 at 1111.92 and 1108.20 on Friday, so unless their fund is really
lagging, that won’t be hard to do. The SPX has initial resistance at 1116 –
1118, then 1120 – 1122. Above that is 1125, the .50 retracement zone to 1163.23.
On the downside, after Friday’s low of
1106.13 is
the 1094 – 1095 level, and of course last week’s low at 1087.06. For the
QQQs,
it is three tops of 35.59, 35.62 and 35.58 on Friday and the key resistance
just
above at 36, along with the 89-day EMA of 35.82 and 50-day EMA at 35.96. The
SMHs have to battle the 40 – 40.50 zone for any carry through.
My checkpoint for the basic industry stocks would
be the XLBs and if they can get past and hold 25.82, having closed Friday at
25.70. For the XBD, it is the 695 – 697 level, having closed at 689.05 on Friday.
We have some levels, and now we can react to the price action.
As I complete this at 7:30 a.m., I see the
futures have increased in the Dow, +53, Nasdaq, +10, and S&Ps, +5.70, so
there
should be some good first-hour strategies in play.
Have a good trading day,
Kevin Haggerty
