Moonshot

October 26, 2001
Kevin Haggerty

Just
another day at the office as
the daytrader continues to prosper as a result of the opening games and emotion.
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at 1085 the previous day, then opened down hard,
trading to 1066 by the 10:05 a.m. bar, which was the intraday low. The 1.28
volatility band was 1066, and we got an excellent Trap Door pattern followed by
two Slim Jims. The first entry was above the high of the narrow six-bar range
after the 1066 low, which was your Trap Door entry. The next two entries were
from the two Slim Jims. Even if you waited until the breakout above the second
Slim Jim, which was above 1074, you then had a moonshot, as the index trended up
all day into the 1100 close. If
you trade on a daily basis and didn’t take any of the entries either in futures,
the
(
SPY |
Quote |
Chart |
News |
PowerRating)s or a related pattern stock, you have other emotional issues and
are still not trading what is. I have included the SPX chart in today’s text
below.

The SPX’s 1080 to 1090
range mentioned
yesterday got resolved with the SPX closing at 1100, right in the .618 and
50-day EMA zone. If we get a follow-through day, the 50-day EMA becomes a
downside pivot. You are aware of the confluence from 1130-1135.Â

NYSE volume increased
slightly to 1.367 billion, but a much better tone with the volume ratio at 67,
and breadth improved to +709. The Nasdaq, led by the techs, had a bigger
increase in volume than the NYSE, with a volume ratio of 76. After a rest day,
the
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) popped +7.9%, and all the energy stocks we had the other day
made good continuation moves. The semis had another great day at +5.3% in the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), and over the past five days, the index has gone +1.5%, +5.4%,
-0.9%, +4.0%, and +5.3% yesterday for +15.3% in five days.

The semis, as I mentioned
in previous texts, were lagging on retracement basis because they were so
oversold and had upside room. Low to high, the
(
SMH |
Quote |
Chart |
News |
PowerRating)s are up 42.4% in 21
days, from 27.31 to 38.90 yesterday. The retracement level in play is the .618
retracement at 39.90, with the 100-day EMA at 40.68 and with other overhead
resistance from 41-42. I’d say the 39 to 42 zone is air pocket city.

The NDX 100
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) was +3.8% yesterday and has advanced five straight days for a
+10.7% run. The .786 retracement level is 1492. The index closed at 1479. Stay
loose in the techs with very fast feet.

Stocks
Today

(
BRCD |
Quote |
Chart |
News |
PowerRating), I hope you
caught the Trap Door at the 2.0 volatility band yesterday down at 23.74 as the
stock traded back up to a 26.27 close.

Have a good trading day,
and have a great weekend.

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

Five-minute chart of
Thursday’s NYSE TICKS

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Moonshot

BUY THE FEAR, SELL THE GREED

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