Power Moves

November 15, 2000
Kevin Haggerty

Yesterday
was a power day across the board both
domestically and internationally. In the U.S., the
Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) advanced
7.2%, reversing almost half of the -14.8% decline of the past six days. The
(
QQQ |
Quote |
Chart |
News |
PowerRating)s were up +8.4% with a Change in Direction day that reversed the
previous two highs and four closes. The problem we as traders had was that the
Qs gapped open 4% and then advanced for the rest of the session with hardly a
tradable pullback as it was a moonshot day.Â

The S&P 500 advanced
2.3% and is now down only 3% since the great heist started in Florida. Much
dialogue, but the S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating) did not make a lower low during this decline,
as it diverged positively from the NDX 100 which is undergoing a valuation
adjustment and big capital gains are being taken off the table. I’d like to have
that problem where my stock was down 30%-50% and still up 150%-300% for the
year! Stock nirvana doesn’t come along often in one lifetime, so wake up and get
real. You might not see another parabolic move like we’ve had for a long time.

Yesterday’s action was good
as total volume of 1.2 billion was more than last week’s average but, more
importantly, the volume ratio was 74 with 777 million up and just 278 million
down. That up volume was more than any of last week’s down days, so that is a
positive. All sectors, led by techs and Internets, were green, with the
exception of banks and utilities.Â

Of the 17 international
webs that trade on the AMEX, 16 were green and all of the world indexes were
green with the exception of the Nikkei, off only 0.3. So
when you listen to the early morning dribble about what international markets
are doing, the only thing of interest to you is: Did they follow our lead?
Because that is all they do.

Swingpoint lows were
confirmed yesterday in both the NDX 100 and S&P 500. The NDX with a close
above the high of the low day, completed an RST buy pattern but it is to a
declining 200-day EMA so it is a 60:40 probability. Keep tight stops if you play
the QQQsÂ and maybe even sell some premium against your longs as who knows
what the hacks in Florida will do, which, as we have seen, can create some rather quick
airpockets.Â

Because of yesterday’s
extreme move, first entries above yesterday’s highs are not recommended unless
it’s with half of your normal position size. Measure Monday’s low and
yesterday’s high, and look for retracement of 50%-62% of that move and then you
could get a good entry from the intraday charts. For those stocks that gapped
yesterday and didn’t pull back, you should be alert for a pullback to at least
the intersection of Monday’s high and Tuesday’s low.Â

An example of this kind of
trade was
(
JNPR |
Quote |
Chart |
News |
PowerRating) yesterday. It closed Monday at 164.5, opened yesterday at
175, traded up to 178, then retraced to 170 which is exactly .618 of the
164.5-178 run. It closed at 183 15/16. Hello? Re-read your chapter on intraday
Fib retracements from your seminar material.

face=”arial, helvetica”>(December Futures)
Fair Value	size=2>Buy	size=2>Sell
7.75	8.95	6.30

Pattern
Setups

Chosen ones that you should
focus on (and I say that not only because of yesterday’s action but where the
following stocks are in relation to their 30-week EMAs which is positive after
the recent carnage):Â

Have a good trading day.

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Power Moves

BUY THE FEAR, SELL THE GREED

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