Maybe The Five-Day Range On The SPX Will Get Challenged
What Wednesday’s Action Tells
You
After thrust comes consolidation, and that is
what we have so far with the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) since it took out the
1144.94
2004 monthly high close last Thursday. The SPX closed at 1162.91 yesterday,
-0.1%, and is in a narrow-range four-day pattern with the past three days’
range
within that 1170.87 – 1160.36 range. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) at 10,385 was -2
points, while both the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), 2035, and
(
QQQ |
Quote |
Chart |
News |
PowerRating), 37.77,
were
-0.4%. There was a late knife down in the last hour from the SPX 1169.31
intraday high and the lower part of the daily chart minor
resistance.
NYSE volume was 1.5 billion shares with the
volume ratio 55 and breadth +587, which was better again than the SPX -0.1%
day.
The short-term overbought condition has
diminished some over the past three days as the 4 MA of the volume ratio is
now
55, down from 70, and the 4 MA of breadth is down to just +73 from +958 last
Friday. The five-day RSI for the SPX remains strong at 82.
In the sectors, it was another good day for
traders in the energy sector, as the
(
OIH |
Quote |
Chart |
News |
PowerRating) closed at 79.94, +2.8% and
+4.8%
low-to-high since hitting its 89-day EMA on Tuesday with a 76.67 low, which
was
also a minor support zone.
The semiconductors led the downside with the
(
SMH |
Quote |
Chart |
News |
PowerRating) -2.7% to 31.87 with the 20-day EMA at 31.91 and 50-day EMA at
31.51.
This continues the retracement (still qualifies as that) from the 11/03
33.58
intraday high vs. its 200-day EMA of 33.86. This was after a +21% rally off
the
27.78 09/07 low (see daily chart).
For Active
Traders
The primary game yesterday was Trap Doors in
energy stocks like
(
DO |
Quote |
Chart |
News |
PowerRating),
(
XTO |
Quote |
Chart |
News |
PowerRating),
(
APC |
Quote |
Chart |
News |
PowerRating),
(
SU |
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Chart |
News |
PowerRating) and
(
KMG |
Quote |
Chart |
News |
PowerRating),
just to
name a few. The OIH reversed after the 10:05 a.m. ET bar above 77.60 and
then an
Opening Reversal above 78 which carried up to 80.36 and a 79.94 close.
Energy
stocks have been very good to us after every retracement. Love that media
when
they talk them down each and every time oil declines, which gives us the
good
setups.
The QQQ traded down to 37.74 (five-minute
chart)
without a contra move until the RST long entry above 37.80 on the 10:45 a.m.
bar. The 37.74 low held, but it was choppy before the QQQ traded up to 38.06
(.618 retracement to 38.16) just before the knife down to a 37.64 low in the
last hour, closing at 37.79. Love those programs.
The
(
SPY |
Quote |
Chart |
News |
PowerRating) traded down to the 240 EMA and
116.76 intraday low on the 10:35 a.m. bar. After the reversal, it carried up
to
a 117.55 intraday high before the last-hour knife down to 116.80, closing at
116.97. I’m sure some of you RST players caught that one.
Today’s
Action
The early futures are green, so maybe the
five-day range on the SPX will get challenged or taken out. The minor
resistance
from 1169.50 – 1175 has been the ceiling, with the low of the high day being
1160.36.
The QQQs are in a four-day range from 38.16 –
37.61 having closed at 37.79 with 39 being the magnet to get taken out for
the
QQQ to gain some more room. Daytraders will get on board above 38.06, which
is
yesterday’s high and third retracement day from the 38.16 high.
Have a good trading day,
Kevin Haggerty
