Los Banditos
The
extent of the move yesterday for the SPX
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$SPX.X |
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the 1,2,3 long entry on the 10:50 a.m. ET bar above 876.45 was a pleasant
surprise as there wasn’t any pullback up to 897.42, and then it only went
sideways before a last half-hour mark-up into the close of 899.54. The early
down carried the SPX to 873, which is the .707 retracement between the last
significant high and low on Friday, which were 866.58 and 886.63, and it was
from there that you got a defined 1,2,3 entry. Many of your e-mails seem to miss
the point that 1,2,3s come at significant highs and lows, not after moves of
only a few points.Â
NYSE volume was average
at 1.4 billion, the volume ratio strong at 82, and breadth only +709, which is
low relative to the volume ratio, so once again the volume was concentrated in
the big cap blue chips, which really shouldn’t surprise us. The Dow
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$INDU |
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$COMPQ |
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$NDX.X |
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Yesterday was another
extremely low volume day for the
(
SPY |
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precedes short-term reversals. On previous up days, the SPY volume has run 75 –
82 million. Friday’s volume was 47 million and yesterday 46, so that is always a
red alert to be aware of. The semis led again — no surprise there — as the SOX
gained +5.2%. The
(
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Intel
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the panic alarm, even rallied back to a 15.53 high yesterday from its 13.42 low
last Wednesday. Thank you, media.
There have been some
king-sized retracements over the last nine days back to declining 200-day EMAs
for stocks like
(
MER |
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(
GS |
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(
C |
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(
LEH |
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(
IP |
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PowerRating), +25%, and a host of others, so they now stay on the radar for defined
entry short patterns.
We start out today with
the early red futures, just as yesterday, and at 8:10 this morning, I see the
Dow futures -78, the S&Ps -9 and Nasdaq -22. The opening discounts and
premiums on the exchanges are getting out of hand, so I’ve been putting in
discount bids and premium offerings in case the specialist gets too greedy. Last
week the SPY openings went -1.1%, +2.8%, -1.4%, +2.8%, -0.7% and yesterday
-0.7%. The SMH specialist borders on the ridiculous. Since Oct. 11, the openings
have gone +3.0%, -1.3%, +8.8%, -8.4%, +8.7%, -1.6% and yesterday -0.9%. There is
no discount or premium opening order you put in that is beyond execution
possibility with these bandits. I have developed a strategy to game it, as long
as the regulators continue to allow the pre-opening trading to control the
exchange openings. It means traders and Program Gangs win, while retail, as
always, gets gassed.
Have a good trading day.
Five-minute chart of
Monday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Monday’s NYSE TICKS