NDX 100 Travel Range To Continue

October 30, 2000
Kevin Haggerty

The
S&P 500 once again had a solid day with
a 21-point advance from 11:00 a.m. to 2:30 p.m. This was after a gap opening and
a run to the first intraday high of 1379. It then retraced only .38 of
Thursday’s 1338 low and the 1379 high and then made the 1385 intraday high just
before 2:30 p.m., closing in the top of the range at 1379.58.Â

Overall volume was again
over 1 billion, the volume ratio positive at 69, with 719 million up and 330
million down, while advancers led decliners by +774. The Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating)
once again had violent travel range as the players all have different
agendas.Â

The index then declined
exactly to the .50 RT level framed from Thursday’s 2956 low and the early 3275
high, before giving a reversal buy pattern. That move was a -5.1% decline. From
there, the NDX rallied +4.5% to a lower high at 3250, declined -3.3% to 3143,
rallied +2% to 3206 before closing at 3174. Excluding the +2% gap opening, that
is a 16% travel range on the day, which is an extraordinary opportunity for
daytraders and those that are trading around long positions.Â

The Generals are all over
the lot, jockeying positions around as many of the funds were caught flat-footed
as the chosen ones imploded. Net, the NDX 100 lost over 8% on the week,
while the S&P 500 was off only 1.2%. The
difference, of course, was many of the mainstream and cyclical stocks, as the Dow
finished the week +3.6%.

This week you will have two
new screens, the 3-Day Wake-up Call and Change in Direction, which will
supplement the current S&P 500 and NDX 100 screens. Both of these screens
were outlined in Friday’s commentary. I will present a lesson next week on the
thought process used when utilizing these screens. They are meant to provide you
with the trading research necessary to identify high-probability setups.

There will probably be a
continuation of travel range for the NDX 100, so do your volatility bands for
the day and also be aware of the current alert levels framed from the 2956 10/26 low
to the 10/27 high of 3275 on your five-minute charts. You start out the day with
the previous close of 3175, which is below all three EMAs on the five-minute
charts. The 260-EMA pivot point on the upside is 3187, then the closest down trendline at about 3195. They can act as acceleration points, depending on the
dynamics.Â

On the downside, the alert
zones are at the .618 RT zone of 3080 and then the .786 RT level of 3025. Before
the NDX 100 gets to those levels, it has to come out of the bottom side of a
triangle at approximately 3150-3160. By doing this exercise in advance, you will
be better prepared to react to changing dynamics and reversal patterns at the
alert levels. If you don’t do it, then you are just winging it and that means
much less probability. Choose your weapon.

face=”arial, helvetica”>(December Futures)
Fair Value	size=2>Buy	size=2>Sell
10.90	12.10	9.70

Pattern
Setups

If we do pullback to those retracement
alert zones, you can certainly play the QQQs and any of the chosen ones from
this list that I published last
week.

Have a good trading day.

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NDX 100 Travel Range To Continue

BUY THE FEAR, SELL THE GREED

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