Penthouse To Outhouse
We are
pleased to announce that Kevin Haggerty’s audio commentary is again available
each morning from 8:30 a.m. ET.
At the
end of the day, the major indexes, the NDX 100
(
NDX |
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News |
PowerRating) and the S&P 500
(
SPX |
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PowerRating) were essentially flat, with rather
narrow-range days. On an intraday basis, both indexes went from the penthouse to
the outhouse and halfway back.Â
The SPX rallied from a 9:40
a.m. low of 1357.28 to a 1369.75 high by 11:30 a.m. It gave you clear sign above
1360, which cleared all of the five-minute-chart EMAs. It then reversed and
declined to the outhouse, making a Double Bottom at 1357.34 on the 1:50 p.m.
bar. From there, it got up to 1366.31 and closed at 1364.30. The
early rally was enough to make it a good trading day with plenty of intraday
setups, especially
(
MU |
Quote |
Chart |
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PowerRating) and some continuation entries in other stocks above
the previous day’s close.Â
The NDX was on the same
track to the penthouse as the SPX. It cleared all EMAs at 2728, and then above
the Flip Top high of 2737 as it ran to an intraday high of 2772. It then
declined to the intraday low of 2692.81, right at the 260-EMA. This bottom also
converged with the 1.27 Fib extension of the first leg up. That 1.27 number was
2687. The NDX was generous as it
gave you a defined 1,2,3 close entry above 2701.75 and the index rallied to
2742.35, closing at 2726.45. The entry was a good risk-reward because your stop
was tight, just below the 260-EMA.Â
Today, we have your
favorite Fed guy as the media builds it up to a Super Bowl crescendo. If you’re
going into today long a straddle — or a synthetic straddle which is long
stock, long puts, or else long futures and long puts — you are set up for
the overreaction. If not, just wait until the futures are run to the extremes
and look for good fade setups. Don’t get caught naked guessing the reaction,
which is not a high-probability decision.
Going into today, the NDX
has rallied 33% off the 2087 low, led by the Semis (+43%). The BKX, XBD, and now
the RLX, are playing above their 200-day EMAs. The OSX (which is the oil service
index) after declining from its highs, has recrossed the 200-day EMA to the
upside and is consolidating in a flag pattern just above the 200-day EMA.Â
The drugs have declined as
the techs have rallied. The DRG is now in a tight triangle pattern right on the
200-day EMA. See the PPHs. It’s a win-win pattern — go with it either way they
break it out and use the PPHs. If they take drugs early, anticipate more
weakness in the techs. Do your homework on the individual drug and oil service
stocks. You will see some high-probability patterns.
(March
|
||
Fair Value
|
Buy
|
Sell
|
9.15
|
 10.45 |
 7.85Â
|
Pattern
Setups
On the long side, SMHs
above 59.10 and also again above 60 out of the base. PPHs — take it either long
or short out of the triangle.Â
On the daily charts also
look at some of the Semis such
(
IDTI |
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Chart |
News |
PowerRating),
(
AMCC |
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Chart |
News |
PowerRating),
(
MU |
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Chart |
News |
PowerRating),
(
AMD |
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Chart |
News |
PowerRating),
(
INTC |
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Chart |
News |
PowerRating),
(
AMAT |
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Chart |
News |
PowerRating),
(
KLAC |
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Chart |
News |
PowerRating),
(
NVLS |
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Chart |
News |
PowerRating), and
(
TER |
Quote |
Chart |
News |
PowerRating).
Other stocks:
(
ADBE |
Quote |
Chart |
News |
PowerRating),
(
INTU |
Quote |
Chart |
News |
PowerRating),
(
AIG |
Quote |
Chart |
News |
PowerRating),
(
COF |
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Chart |
News |
PowerRating),
(
PVN |
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Chart |
News |
PowerRating),
(
FITB |
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Chart |
News |
PowerRating) and
(
MERQ |
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Chart |
News |
PowerRating) (take
it either way, long or short, using the 200-day EMA as your pivot),
(
SUNW |
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Chart |
News |
PowerRating)
and
(
CSCO |
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Chart |
News |
PowerRating).
Have a good trading day.