Look To The Generals

August 21, 2000
Kevin Haggerty

The
S&P 500, after an early up until about 11:00 a.m., traded down until
just before 2:00 p.m. The early move was accompanied by a negative divergence of
New York Stock Exchange ticks. The index then traded down to its 260-EMA on your
five-minute charts, and then staged an option-expiration rally until 3:30 p.m.,
before selling down into the close to just above its 260-day EMA.

The S&P 500 closed at
1491.72, and has yet to close above the 1495 retracement level. The
1499.45 high was just below the down trendline on the S&P 500 weekly chart,
which has formed a classical symmetrical triangle and is bounded on the bottom
just below the 40-week moving average.

The New York Composite has
broken upside resistance above 660, so let’s see if the Generals are going to
break the S&P 500 out to the upside, or take it south.Â

It will take a significant
volume pickup to give investors some confidence.

The SOX closed Friday
+2.1%, capping a big week for the semis at +14.9%. The financials, after their
recent run, were slightly negative on the week and had gotten ahead of
themselves.Â

Friday was another
light-volume day with negative breadth, and institutional blocks of only
16,504.Â As is often the
case, most of the option-related program volatility took place prior to Friday.

Tuesday is FOMC day and the
current rally has discounted it as a non-event. You
should look for opportunities on your intraday charts today, as there are not
many good continuation setups on the daily charts.

With the S&P 500 at
both retracement and weekly resistance, we look for the Generals to give us
direction.

face=”arial, helvetica”>(September Futures)
Fair Value	size=2>Buy	size=2>Sell
6.55	7.75	5.45

Pattern
Setups

On the short side, if we get a
surprise to the downside, I’d stay with the Qs
(
QQQ |
Quote |
Chart |
News |
PowerRating).

Have a good day.

Look To The Generals

BUY THE FEAR, SELL THE GREED

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