Price Action Zones For Today
What Monday’s Action Tells
You
With the kind of price action we have had
recently, it is no surprise why money managers are having such a tough time
putting positive numbers on the board so far this year. The media news
swings
have been from “best in 20 years” reports to “the economy’s
crashing.” Not a
chance, folks. It’s not happening that way. This is positive for daytraders,
however, especially the first-hour strategies.
The market action yesterday was about
technology,
with the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) -1.9%, the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s -2.4%, with the
primary
culprit being the semiconductors, with the
(
SMH |
Quote |
Chart |
News |
PowerRating) -4.1%.
(
INTC |
Quote |
Chart |
News |
PowerRating)
at -4.4%
was the major drag on the tech indices, and is now down 20% high-to-low from
the
34.60 high. INTC closed at 27.70, below the 28.41 200-day EMA, with the .382
retracement to the 12.95 2002 low at 26.37. There is also an extension level
at
26.69, so it’s a price action zone of interest for me. The last two days
have
been the biggest volume days for INTC since August of 2003.
NYSE volume was lower again yesterday at 1.25
billion, with the volume ratio 28, and breadth -512. The 4 MA of the volume
ratio is neutral at 50. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at 1147.20, -0.8%,
and
the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) 10,529, -0.6%.
In the sectors, the brokers (XBD) followed the
SMHs at -1.6%, then the CYC -1.3%. The consumer staples and other defensive
issues held their ground. Net net, we don’t want to see that trend continue.
The common thread yesterday, away from the semis, was the Generals chasing the
medical stocks higher, like
(
MDT |
Quote |
Chart |
News |
PowerRating),
(
STJ |
Quote |
Chart |
News |
PowerRating),
(
GDT |
Quote |
Chart |
News |
PowerRating) and
(
SYK |
Quote |
Chart |
News |
PowerRating), all
up on increased volume. Some of them are now very extended as some more defensive
money piles on them as tech gets cut back.
| size=2> | Tuesday
3/2 |
Wednesday
3/3 |
Thursday
3/4 |
Friday
3/5 |
Monday
3/8 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High | 1156.54 | 1152.44 | 1154.97 | 1163.23 | 1156.86 |
| color=#0000ff>Low | 1147.31 | 1143.78 | 1149.81 | 1148.71 | 1146.97 |
| color=#0000ff>Close | 1149.10 | 1151.02 | 1154.88 | 1156.86 | 1147.20 |
| color=#0000ff>% | -0.6 | +0.2 | +0.3 | +0.2 | -0.8 |
| color=#0000ff>Range | 9.2 | 8.7 | 5.2 | 14.5 | 9.9 |
| color=#0000ff>% Range | 21 | 83 | 97 | 56 | 2 |
| color=#0000ff>INDU | 10591 | 10593 | 10588 | 10596 | 10529 |
| color=#0000ff>% | -0.8 | +.02 | -.05 | +.07 | -0.6 |
| color=#0000ff>Nasdaq | 2040 | 2033 | 2055 | 2048 | 2009 |
| color=#0000ff>% | -0.9 | -0.3 | +1.1 | -0.4 | -1.9 |
| color=#0000ff>QQQ | 36.61 | 36.39 | 36.81 | 36.65 | 35.76 |
| color=#0000ff>% | -1.2 | -0.6 | +1.1 | -0.3 | -2.4 |
| color=#0000ff>NYSE | |||||
| color=#0000ff>T. VOL | 1.48 | 1.33 | 1.26 | 1.37 | 1.25 |
| color=#0000ff>U. VOL | 532 | 641 | 783 | 819 | 372 |
| color=#0000ff>D. VOL | 931 | 654 | 438 | 538 | 866 |
| color=#0000ff>VR | 36 | 49 | 64 | 60 | 28 |
| color=#0000ff>4 MA | 61 | 57 | 58 | 52 | 50 |
| color=#0000ff>5 RSI | 56 | 58 | 66 | 69 | 43 |
| color=#0000ff>ADV | 1436 | 1609 | 2035 | 2236 | 1394 |
| color=#0000ff>DEC | 1852 | 1666 | 1237 | 1075 | 1906 |
| color=#0000ff>A-D | -416 | -57 | +798 | +1161 | -512 |
| color=#0000ff>4 MA | +814 | +584 | +510 | +371 | +347 |
| color=#0000ff>SECTORS | |||||
| color=#0000ff>SMH | -0.2 | -1.8 | +1.8 | -0.9 | -4.1 |
| color=#0000ff>BKX | -0.5 | +0.6 | -.03 | +1.0 | -0.4 |
| color=#0000ff>XBD | -0.3 | +.02 | +1.1 | +0.6 | -1.6 |
| color=#0000ff>RTH | -1.2 | +0.7 | +0.3 | -.03 | -0.6 |
| color=#0000ff>CYC | -0.9 | -.05 | -.08 | +0.1 | -1.3 |
| color=#0000ff>PPH | -0.9 | +0.2 | +0.4 | +0.2 | -0.2 |
| color=#0000ff>OIH | +0.3 | -0.7 | -0.3 | -0.6 | +0.2 |
| color=#0000ff>BBH | -0.2 | +0.9 | +0.7 | +1.6 | -1.5 |
| color=#0000ff>TLT | -0.6 | -0.2 | +0.4 | +1.9 | +0.6 |
| color=#0000ff>XAU | -3.2 | -.09 | +1.4 | +2.9 | -1.1 |
^next^
For Active
Traders
The S&P E-minis traded in less than a 5
point
range all morning yesterday until the breakout below 1155 on the 12:15 p.m.
ET
bar, and it was a knife down into the close. The SPX traded down to 1147
with
the 20-day EMA at 1146.79, which is the starting point for today. The Dow,
which
has been weaker, closed at 10,529 with the 50-day EMA at 10,484. The low of
the
current 30-day trading range is 10,418, and the low close is 10,468. The
five-day RSI is 29.65 vs. the SPX at 43, so it’s probably a better reflex
trade
today than the SPX if there is an early decline.
The QQQs are at a much more interesting level
for
any reflex. The five-day RSI is 25, and there is a confluence of four
numbers
between 35.25 and 35.32, in addition to an extension level at 35.88 with the
QQQs closing yesterday at 35.76. Those of you that are involved with
sequence
also see that price is at the extended short-term band levels on both the
20-day
and five-day basis, so the long-side setups take precedence today in this
zone.
Watch the Nasdaq price action for a read today
at the 89-day EMA level around 2000, which is also a trading range support line,
with the lower channel and an AB=CD level around 1955 – 1945. The SPY is at
the five-day band, which is just below 115, having closed at 114.96. The 20-day
band is the 114.25 – 114.50 level. For the DIAs, the 20-day is 104.65 – 104.75
and is also right on the five-day band having closed 105.19.
The best action for today’s trader would be
an
early down closer to the extended bands for the best reversal opportunities.
Turn your TV volume off and trade the price action.
Have a good trading day,
Kevin Haggerty
P.S. You can finally learn
what traders have been asking me to teach them for years—