Potential Explosive Setups If The Generals Show Up
The
major indices were quiet, as
the SPX
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$SPX.X |
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$INDU |
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$NDX.X |
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finishing at 1.26 billion, but that will be resolved soon. The volume ratio was
neutral at 49, and breadth was +324. I derive nothing from the pause days that
indicate no significant buying or selling pressure in the major indices or
sectors.
There was, however, some
opportunity after the early gap down on the opening. If you trade the S&P
futures or SPYs, you had a good Trap Door, which was also an RST, that
re-crossed the 50-day EMA to the upside. The move ran for 12 points. For those
of you working with the 1,2,3s, there was a sell pattern after the SPX hit the
909.94 intraday high that carried down to 900.86. Some of you may have also
covered and/or went long on this .618 retracement to the 896.48 intraday low,
which then ran 6 points to 908.21 before closing at 905.15. The .618 level was
901.62.
The
(
QQQ |
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1,2,3 entry, while the
(
SMH |
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first nine bars between 25 and 24.80. The breakout carried to 26 before backing
off to close at 25.39.
Right now the red flag is
Monday’s low of 891.97, which is also the level of the .618 retracement from 965
to 769, which is 890, and for you pivot players the monthly S1 level for the SPX
is 891.63, and the monthly pivot is up at 916.73. FYI: I refer to the SPX cash
index all of the time, but trade the futures and SPDRs, so it makes no sense to
mention the others. To trade the S&P futures, it is better work off the SPX
chart as your primary.
Yesterday’s stocks that
set up again today are
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MSFT |
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SNDK |
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PCAR |
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(
NATI |
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(
SII |
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(
BHI |
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(
CAT |
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(
MERQ |
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CMVT |
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(
LIN |
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SYMC |
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STM |
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in addition to
(
KLAC |
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(
MXIM |
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INTC |
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PowerRating), all of which have
pulled back to their rising 50-day EMAs. Maybe the Generals will surprise us
today, but in order to take advantage of that, we must prepare the plan.
On the shortside, I will
stay with the index proxies.
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