Pre-Greenspan Dance
The
opening Friday was also the intraday high
of 1238 for the S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating), as it trended down all day making an
intraday low of 1221.41 on the 3:05 p.m. bar, then closing at 1225.35. The Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating), with some of the semis trading up despite
(
MU |
Quote |
Chart |
News |
PowerRating), had another test
of the 1768 resistance, hitting 1773, before selling off to an intraday low of
1718.35, then closing at 1727.47.
The biotechs sold off on
some company and regulatory news, while the drugs did the same, led to the
downside by
(
MRK |
Quote |
Chart |
News |
PowerRating)‘s news of disappointing quarterly results. About the only
thing we got Friday was trade-through entry in
(
KLAC |
Quote |
Chart |
News |
PowerRating),
(
NVLS |
Quote |
Chart |
News |
PowerRating) and
(
BRCM |
Quote |
Chart |
News |
PowerRating).
Coming off of Friday’s
sloppy action, you have the SPX which doesn’t get going to the upside until it
clears 1231, and then runs into the box of resistance starting at 1246. On the
downside, a drop below the 1222-1220 level gets the index looking at that
1200.50 retracement level it traded at 6/15/01 when it hit 1203. Below
1203, it visits the 1170-1180 party.
The NDX runs into minor
resistance at 1738 and again at 1745-1750, before getting another shot at the
1768 zone. You know the lower retracement levels at 1626 and 1504, if it breaks
the 1655 low. I have included
charts from last week of the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) and S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating) which
gave you short entry patterns at the lower boundary of the box
resistance which I have referred to in recent text.
The NDX is an example of a
1,2,3 Higher Top and the SPX is a 1,2,3 Lower Top. In both these basic — but
extremely effective — reversal patterns, there must first be a significant move
relative to the time frame you are working in and the trendline of this move
must be broken before the pattern sets up. In both these cases, they developed
right at the resistance which you had in your trading plan.
Nasdaq
100 five-minute chart
(6/21/01) with 8- and
20–period
EMAs
S&P 500 five-minute chart
(6/21/01) with 8- and
20-period
EMAs
With FOMC on Tuesday and
Wednesday in addition to the continued earnings warnings, today is probably
going to be choppy. If the trade isn’t there, don’t take it for the sake of
doing something when you know in your heart that the best trade can often be no
trade.
|
(September
|
||
|
Fair Value
|
Buy
|
Sell
|
|
7.85
|
 9.15  |
 6.70 Â
|
Stocks
Today
I don’t see anything
jumping out at me on the SPX or NDX screens from the long side. There are some
top-of-the-range closes in utilities and a few energies, but I want to see the
financials, semis, a few of the major basics and some biotechs for some extra
froth before I get too enthusiastic.
Stocks today to focus on in
the financials:
(
AIG |
Quote |
Chart |
News |
PowerRating),
(
C |
Quote |
Chart |
News |
PowerRating),
(
FITB |
Quote |
Chart |
News |
PowerRating),
(
PVN |
Quote |
Chart |
News |
PowerRating),
(
COF |
Quote |
Chart |
News |
PowerRating) and
(
CB |
Quote |
Chart |
News |
PowerRating)
(above Thursday’s high). You have to have financials on your sheet just in case
they play the interest-game today.
A couple of energies to
look at are
(
APA |
Quote |
Chart |
News |
PowerRating) and
(
NBR |
Quote |
Chart |
News |
PowerRating).
Some other stocks:
(
VRSN |
Quote |
Chart |
News |
PowerRating),
(
ADLAC |
Quote |
Chart |
News |
PowerRating), and
(
QCOM |
Quote |
Chart |
News |
PowerRating).
In the semis, these stocks
seem to give us setups long or short every day, so focus on
(
KLAC |
Quote |
Chart |
News |
PowerRating),
(
NVLS |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
NVDA |
Quote |
Chart |
News |
PowerRating) and
(
QLGC |
Quote |
Chart |
News |
PowerRating).
On the short side, look at
(
LLTC |
Quote |
Chart |
News |
PowerRating),
(
MERQ |
Quote |
Chart |
News |
PowerRating),
(
CRA |
Quote |
Chart |
News |
PowerRating),
(
IDPH |
Quote |
Chart |
News |
PowerRating) (if it breaks the Double
Bottom) and
(
PDLI |
Quote |
Chart |
News |
PowerRating).
Have a good trading day.
Friday’s S&P 500 five-minute chart
with 8-, 20-,
60- and 260-period
EMAs
Friday’s NYSE
TICK five-minute chart