One Day A Market Doesn’t Make
I
guess the four positive days of NYSE breadth was
telling us something. It was a green day across all sectors yesterday, with NYSE
volume increasing to 1.49 billion, which is above average, a volume ratio of 66,
and breadth excellent at +1339. The Nasdaq volume increased to 1.9 billion, with
the volume ratio still below neutral at 46. The Dow, led by the cyclicals, was
+1.7%, the SPX
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$SPX.X |
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$NDX.X |
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bounced off the .618 retracement level to the September low for the second time,
which now becomes an inflection point to the downside.
The
(
BBH |
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oversold pop at +5.5% on a gap opening, so no entry, no loss there. The
(
$XAU.X |
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(
$OSX.X |
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The semis ended +1.1%, and many of the majors had above-average volume, but it
was mixed volume because of the strong initial downtrend.
The major indices traded
very geometrically yesterday and made all of us sequence traders very happy. The
NDX gave you two defined extension entries. The SPX had a double bottom with a
classic reversal bar entry pattern, while the DJX gave you a Fib retracement.
See your five-minute charts. Those of you joining me in Santa
Monica this May will learn how to set up in advance for these sequence
trades so you can maximize the travel range of indices and stocks.Â
One day a market doesn’t
make, especially when I see the oversold biotechs and gold lead, along with the
oversold drugs, and the OSX which is moving with Middle East developments. I
want to see the NYSE and Nasdaq volume expand and see buying pressure in the
semis, financials, retail and healthcare stocks. There are only so many defense
stocks you can buy, as everyone has obviously piled on. The housing stocks have
declined about 20% since the advance alert I put out, and I see stocks like
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ATK |
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LLL |
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200-day EMAs, but are probably going higher. They are a much better story than
the housing stocks. If you play, I suggest the pullbacks, not the continuation
breakouts. Leave those for O’Neil.Â
Stocks
Today
In the semis,
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KLAC |
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and
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LTXX |
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(
NVLS |
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is a 50-EMA pullback.
In the financials, look
at
(
WFC |
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(
FITB |
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In the defense stocks,
look at
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GE |
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(
NOC |
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PowerRating). They might want to chase
(
ATK |
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PowerRating) and
(
LLL |
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PowerRating).
Also, in the energies,
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APA |
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and
(
APC |
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Some other stocks:
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AL |
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UTX |
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SCHL |
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(
PCAR |
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PowerRating).
If we go red again today,
stay with the proxies and probably with the
(
QQQ |
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PowerRating)s.Â
Have a good trading day.
Five-minute chart of
Wednesday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Wednesday’s NYSE TICKS
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