Pigs At The Trough

January 4, 2002
Kevin Haggerty

The
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) traded sideways most of the day with
95% of the action between 1160-1157. The SPX finished +10.6 points, or +0.9%,
with 7 of those points coming in — you guessed it — from 2:50 to 4:00 p.m.
They are determined to keep the first five days of January on the plus side with
the reinvestment of new monies. The SPX looks like it’s ready to challenge the
1174-1208 resistance level.Â

Overall, NYSE volume was
1.3 billion, the volume ratio was a disappointing 56, but the breadth was very
positive at +1004. The NDX broke above 1638, which is another strong positive,
and the 30-week EMA of 1617 after a three-week pullback. It is also once again
above its 200-day SMA of 1615 and below its 200-day EMA which is 1740.78. The
high in this rally was 1734.58, which was during the week of Dec. 5. The
Dow Jones is sitting in a cup-and-handle pattern right above the 200-day SMA, so
the program gang has an inflection point to accelerate, which the daytrader can
ride.

You can see how the
Generals threw money at various industries yesterday if you check the 3 Day Wake
Up Call screen this morning. This screen identifies stocks in the S&P 500
and NDX 100 that have closed above the previous two days’ highs, have the
largest daily range for three days and the most daily volume in three days.
There you will see the semis, railroads, chemicals and some of the brokers. Ford
Motor
(
F |
Quote |
Chart |
News |
PowerRating) also pops up as it rebounds from year-end tax-loss selling. FYI: It
was an RST above the 15.14 high on Dec. 19. I trust some of you seminar people
took a report that day because it closed at 15.25, and by our RST rule
discipline, you are allowed to stay long the position.

Stocks
Today

Be careful on any first
entries in the semis with, at most, 1/2 a position and a tight stop. Most of the
semis are up 12% to 20% in two days, as the portfolio managers trip over
themselves following a newspaper. Positions held in
(
SMH |
Quote |
Chart |
News |
PowerRating)s for year-end and
the reinvestment period of early January are up over 10% in six trading days, so
the pigs at the trough eating the semis are welcome to 40% of the position this
morning, with the stop on the other 60% moved up to 45.95, which is
approximately the 10% gain level.

Have a good trading day.

Five-minute chart of
Thursday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Thursday’s NYSE TICKS

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Pigs At The Trough

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