Nasdaq 100’s Four-Day Flirt Continues

August 3, 2000
Kevin Haggerty

Yesterday
was a two-trend day for the
S&P 500. Morning up, and the afternoon trend down, starting at about 1:00
p.m. There was early warning of the change from up to down with a clearly
defined negative divergence in New York Stock Exchange Ticks. This was very
similar to Tuesday’s action when the S&P 500 trend was up, sideways, and
then straight up for about 10 points, topping out about 2:30 p.m. Then they ran
them down the same 10 points in just 30 minutes.Â

This afternoon top was
also preceded by an obvious negative divergence in New York Stock Exchange
ticks. This kind of action is initiated by program agendas, as they can move a
nervous market any way they want, if the Generals are not clearly in a definite
buying or selling pattern. Afternoon selling into an early uptrend is never a
positive sign.

You should be saving
these charts from the text every day and your timing and recognition of patterns
will greatly improve and enhance your trading. The
last two days are excellent examples of early warnings with negative divergences
in New York Stock Exchange ticks.Â

Today is the
always-volatile first-Friday-of-the-month show, so we will see whether
yesterday’s afternoon downtrend was just program-initiated, or a prelude to
today’s over-emphasized data release. The futures are now off over 10 points,
and most of the screen is red except in some biotechs.Â

The Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating)
closed yesterday at 3490, -0.8% for the day, and just below its 200-day EMA, as
it continues its four-day flirt with this pivot point. Yesterday was an outside
day and it closed in the bottom of its range. This is a crucial short-term
inflection area and should be traded, but with the S&Ps off over 10 points,
the QQQs will gap down and you will probably have to wait for a second entry or
pullback short if it sets up. You have your NDX
retracement levels from previous commentary and if we head south below the
lows of the past four days, we will reach one of those levels in a blink.

(September Futures)

Fair
Value

Buy

Sell

10.00

11.20

8.80

Pattern Setups

Shorts: I’d stay with the QQQs
(
QQQ |
Quote |
Chart |
News |
PowerRating)
and work that chart all day long on your intraday chart. Take advantage — if
we’re down and pull back to the down trendline, take ’em.

Have a good trading day.

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Nasdaq 100’s Four-Day Flirt Continues

BUY THE FEAR, SELL THE GREED

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