Need The Turk
Owing to technical difficulties associated with GlobalCrossing, Kevin
Haggerty’s audio commentary is unavailable today. We apologize for any
inconvenience.
Yesterday
certainly lent credence to the
notion that long term is after lunch for a trader. Before Mr. Contradiction
babbled in Washington, there was a good early rush, led by the Semis. It was
enough time to make the daytrader’s day, as there was good entry and multipoint
moves in the various stocks, but very discouraging from an overall market
perspective.
The
(
SOX |
Quote |
Chart |
News |
PowerRating) opened at 641
and ran 4% to 667 by the 10:30 a.m. bar. It backed off, went sideways, then
broke down from the same pattern as the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating). From high to low,
it was -5.7%, closing at 629. The NDX opened up 1.2%, then ran up to 2368 just
below the 2375-2415 resistance mentioned yesterday. It went sideways and formed
a symmetrical triangle as the volatility contracted.Â
It broke down from the
pattern below 2335, which was also below the 8-period moving average of the low,
and traded to an intraday low of 2208, and closed there. This was -6.8% high to
low. It puts the NDX below the
2234 .786 retracement level and unless we get an instant turnaround, the highest
probability is the immediate test of the 2087 low.
The S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating)
ran early to the resistance at 1335-1341, hitting 1337 and then fading, but gave
one more try at new intraday highs hitting 1336 on the 12:30 p.m. bar, before
dropping like a Greenspan knife to 1318, closing at 1328.80 — which is right on
the .50 retracement level. The .618 RT is 1303 and the .786 is 1281.Â
Greenspan basically told
you that the market-discounting mechanism is wrong which has called this
recession early, and that we are not in a recession, but then out of the other
side of his mouth said it could get weaker before it gets stronger. He must have
had dinner with Yogi Berra before his speech!
The NDX closed in the
bottom of its range on an outside bar while the SPX also closed in the bottom of
its range, so there is no mystery where continuation shorts begin. We need the
Turk to show up today.
|
(March
|
||
|
Fair Value
|
Buy
|
Sell
|
|
5.45
|
6.70Â |
 4.20Â
|
Pattern
Setups
In the energies, the only
sector that had more than the few stocks closing above their midpoint, take a
look at
(
HAL |
Quote |
Chart |
News |
PowerRating),
(
NE |
Quote |
Chart |
News |
PowerRating),
(
APA |
Quote |
Chart |
News |
PowerRating),
(
APC |
Quote |
Chart |
News |
PowerRating),
(
ENE |
Quote |
Chart |
News |
PowerRating),
(
RDC |
Quote |
Chart |
News |
PowerRating),
(
TX |
Quote |
Chart |
News |
PowerRating)
and
(
CHV |
Quote |
Chart |
News |
PowerRating). Other stocks to look at areÂ
(
MMM |
Quote |
Chart |
News |
PowerRating),
(
WY |
Quote |
Chart |
News |
PowerRating),
(
IP |
Quote |
Chart |
News |
PowerRating)
(above Monday’s high),
(
AA |
Quote |
Chart |
News |
PowerRating) (above its 20-day EMA of 35.75) and
(
MDT |
Quote |
Chart |
News |
PowerRating).Â
In
the techs, only one stock in the NDX 100 closed above its midpoint and that was
(
DLTR |
Quote |
Chart |
News |
PowerRating) — which isn’t even a tech.
(
MU |
Quote |
Chart |
News |
PowerRating)
was the best-acting tech and Semi yesterday, as it closed at 41.5, + 5.3% on the
day, and seventh best in the S&P 500. That
means there had to be a large buyer or two, because on yesterday’s tape and
afternoon tech selloff, you would have expected MU to back off with the rest of
the semis.Â
You
have to expect a weak tech opening this morning, which puts you on Trap Door and
Volatility Band watch. MU will be the first on the screen in any early down
because of yesterday’s strength, so you want to look for opportunities on any
kind of intraday setups. I would be reluctant to play any continuation shorts
early in the techs and would rather wait for a contra rally after the early
down, then see if they set up short.
Have a good trading day.
