More Earnings Hype
The more
things change, the more they
stay the same during this earnings/news market. Networking stocks, telecom
equipment and the semiconductors, led by the semi equipments which was triggered
by
(
AMAT |
Quote |
Chart |
News |
PowerRating)‘s chairman’s remarks through his crystal ball, all headed south.
The SOX got whacked for a -6.04% loss, the BTK -6.7% and the OSX -7.4%.The sheep
all moved to the same pasture, as a herd.Â
The news reactions to techs
and biotechs have reached extreme volatility levels. Great for daytraders —
assuming you go out flat — and a landmine field for any kind of position
attempts. It doesn’t take volume to send the indexes down the spiral staircase,
just an absence of buyers, a few programs, and the market makers pulling the
plug on retail sell orders.
Yesterday the NYSE traded
just over 90% of its average volume, totaling 1.035 billion. The volume ratio
was 32, with declines over advances by 697. The Nasdaq, excluding the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) and some related larger stocks, is primarily a retail market and they
are not involved here in any big way, except to repair losses. Yesterday, the
Nasdaq was once again light at 1.485 billion, which was only 80% of its average
daily volume. The volume ratio was just 20.Â
All of the major indexes
finished red, led by the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) (-3.7%), the S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating) (-1.1%), and the Dow -0.6%. In
Friday’s
text, I said the NDX meets sellers at the 1790-1800 level — which was the
down trendline from 2074, right at the 50-day EMA — and also to expect a minor
cycle high on July 16, plus or minus a day. Monday’s
newspaper delivered to you in Friday’s text was opportunistic as the NDX topped
at 1783 on the 1:15 p.m. bar Friday, and hit a 1682.70 low yesterday, closing at
1685.74. It has now retraced 53% of the move from the 1600 low. The S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating) also sold off at the down trendline at the 1220 level yesterday,
trading down to the larger .50 retracement at 1200, closing at 1202.45.
There is more earnings hype
this week, with many of the Dow stocks reporting and about 30% of the S&P
500 stocks set to report between now and Friday, which is also option
expiration. We haven’t seen
anything that would indicate positive, so more down is the higher probability
and I suspect that will put the indexes in position for a longer rally attempt.
Re-read Friday’s
text for the retracement levels that will come into play if we sell off some
more.
(September
|
||
Fair Value
|
Buy
|
Sell
|
5.90
|
 7.15 |
|
Stocks
Today
With the expected increased
volatility, the index SPDRs, especially the QQQs, will be an easier read than
most stocks. For individual stocks to focus on, I would go right to yesterday’s
stocks with the increased volume, wide ranges and percentage moves — obviously
all of them mostly down. You
should get good reflex bounces or continuation shorts.
In the semis, focus on:
(
AMAT |
Quote |
Chart |
News |
PowerRating),
(
QLGC |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
MU |
Quote |
Chart |
News |
PowerRating),
(
NVDA |
Quote |
Chart |
News |
PowerRating),
(
KLAC |
Quote |
Chart |
News |
PowerRating) and
(
NVLS |
Quote |
Chart |
News |
PowerRating).
In the biotechs:
(
GENZ |
Quote |
Chart |
News |
PowerRating),
(
IDPH |
Quote |
Chart |
News |
PowerRating),
(
PDLI |
Quote |
Chart |
News |
PowerRating) and
(
HGSI |
Quote |
Chart |
News |
PowerRating). Also
the BBHs which closed at 110.22 with the .618 retracement at 112.22. On Friday,
the BBHs rallied 6.4 points or 5.8% off the 113 low which was a good reaction
off this .618 Fib level but 104 which is the .786 level is now in play.Â
Also look at
(
MERQ |
Quote |
Chart |
News |
PowerRating),
(
SEBL |
Quote |
Chart |
News |
PowerRating)
and
(
VRTS |
Quote |
Chart |
News |
PowerRating).Â
There will be intraday
setups in over half of the 15 mentioned stocks, not to mention the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s,
etc. If you focus on these, you will do well. If you shotgun all over the
screen, you will probably freeze like a deer in the headlights.
Have a good trading day.
Monday’s S&P 500 five-minute chart
with 8-, 20-, 60-
and 260-period
EMAs.
Monday’s NYSE
TICK five-minute chart
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