Prices At Key Retracement Zones, So Don’t Be Surprised…
What Monday’s Action Tells
You
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) made up 55% of
Friday’s
-0.9% day, closing at 1127.23, +0.5% and above its 1123.67 close five days
ago,
as opposed to the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating), which was +0.3% yesterday, closing at
10,485 and below the same close of five days ago at 10,539. Technology gave
the
Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) and
(
QQQ |
Quote |
Chart |
News |
PowerRating)s another push yesterday at +1.1% and a
new
high close of 2100, while the QQQs closed at 38.35, +1.6%. Only two sectors
outperformed the SPX yesterday, and they were the
(
SMH |
Quote |
Chart |
News |
PowerRating), +2.2%, which
follows a +7.9% week, and the XBD, +1.1%.
The
(
OIH |
Quote |
Chart |
News |
PowerRating) was +5.4% last week and gave
back
some yesterday at -0.7%. The XLE (energy SPDR) is +12.8% since we bought the
25
breakout and has now hit the .618 retracement zone to the primary high of
34.90,
so the remainder of the position has a tight trailing stop of 1.5 times the
average daily range.
NYSE volume was still on the higher end at
1.47
billion shares, and volume ratio 63. Breadth was the best of the past five
days
at +849, while the five-day RSI is below 70 for the second day in a row at
67.
| size=2> |
Tuesday
1/6 |
Wednesday
1/7 |
Thursday
1/8 |
Friday
1/9 |
Monday
1/12 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High |
1124.48
|
1126.33
|
1131.92
|
1131.92
|
1127.85
|
| color=#0000ff>Low |
1118.44
|
1116.45
|
1124.91
|
1120.90
|
1120.90
|
| color=#0000ff>Close |
1123.67
|
1126.33
|
1131.92
|
1121.86
|
1127.23
|
| color=#0000ff>% |
+0.1
|
+0.2
|
+0.5
|
-0.9
|
+0.5
|
| color=#0000ff>Range |
6.0
|
9.9
|
7.0
|
11
|
7.0
|
| color=#0000ff>% Range |
87
|
100
|
100
|
10
|
90
|
| color=#0000ff>INDU |
10539
|
10529
|
10592
|
10459
|
10485
|
| color=#0000ff>% |
-.05
|
-.09
|
+0.6
|
-1.3
|
+0.3
|
| color=#0000ff>Nasdaq |
2057
|
2078
|
2100
|
2087
|
2112
|
| color=#0000ff>% |
-0.5
|
+1.0
|
+1.1
|
-0.6
|
+1.2
|
| color=#0000ff>QQQ |
37.32
|
37.68
|
38
|
37.74
|
38.35
|
| color=#0000ff>% |
+0.6
|
+0.9
|
+0.9
|
-0.6
|
+1.6
|
| color=#0000ff>NYSE |
|
|
|
|
|
| color=#0000ff>T. VOL |
1.49
|
1.7
|
1.86
|
1.67
|
1.47
|
| color=#0000ff>U. VOL |
778
|
957
|
1.25
|
615
|
914
|
| color=#0000ff>D. VOL |
688
|
709
|
603
|
1.04
|
535
|
| color=#0000ff>VR |
53
|
57
|
67
|
37
|
63
|
| color=#0000ff>4 MA |
59
|
60
|
63
|
53
|
56
|
| color=#0000ff>5 RSI |
87
|
92
|
91
|
60
|
67
|
| color=#0000ff>ADV |
1724
|
1775
|
2033
|
1639
|
2079
|
| color=#0000ff>DEC |
1579
|
1541
|
1254
|
1661
|
1230
|
| color=#0000ff>A-D |
+145
|
+234
|
+779
|
-22
|
+849
|
| color=#0000ff>4 MA |
+355
|
+447
|
+582
|
+284
|
+460
|
| color=#0000ff>SECTORS |
|
|
|
|
|
| color=#0000ff>SMH |
+0.6
|
+1.2
|
+2.7
|
-0.2
|
+2.2
|
| color=#0000ff>BKX |
+0.2
|
-.07
|
+0.3
|
-0.4
|
-.01
|
| color=#0000ff>XBD |
+0.4
|
+1.0
|
+0.1
|
-0.9
|
+1.1
|
| color=#0000ff>RTH |
+1.5
|
-.09
|
-1.3
|
-0.3
|
-0.3
|
| color=#0000ff>CYC |
-0.5
|
-.02
|
+1.2
|
-1.0
|
+0.6
|
| color=#0000ff>PPH |
-0.2
|
+1.0
|
-0.8
|
-0.8
|
-0.1
|
| color=#0000ff>OIH |
-0.1
|
-1.6
|
+2.1
|
+3.8
|
-0.7
|
| color=#0000ff>BBH |
+0.1
|
+1.6
|
-1.2
|
-.04
|
-0.2
|
| color=#0000ff>TLT |
+1.1
|
+0.4
|
-0.1
|
+1.8
|
-.08
|
| color=#0000ff>XAU |
-2.0
|
-2.1
|
+0.6
|
+1.4
|
-1.7
|
^next^
For Active
Traders
The trend up day was good for traders with no whipsaws
if you trade S&P futures/SPY, SMH and QQQs. The SPX gave you a 1,2,3
double bottom using Friday’s 1120.90 low as the 1 point, which was matched with
yesterday’s 1120.90 low. Entry was above 1121.86 on the 10:15 a.m. ET bar. The
SPY entry was above 112.52 and traded up to a 113.22 close. On the same 10:15
a.m. bar, your entry in the S&P E-mini was above 1121.25 as they traded
up to an 1128 close. The SMH made the same 1,2,3 double bottom as the SPX, holding
Friday’s last swing point low of 44.50. Entry was above 44.66 on the 9:55 a.m.
bar, and it was trend up into a 45.74 close. There were certainly no really
good short setups as no selling pressure has shown up as of yet, as the SMHs
are +19.1% from the 38.41 low zone of confluence.
The semis, along with some Internet and communication
equipment stocks, in addition to some software stocks, have had a rush the past
week, while the basics and some capital goods stocks have backed off a bit.
Homebuilders, like
(
CTX |
Quote |
Chart |
News |
PowerRating),
(
PHM |
Quote |
Chart |
News |
PowerRating) and
(
KBH |
Quote |
Chart |
News |
PowerRating), just to name a few, continue
to be a short side focus. Yesterday provided Slim
Jim short trades in all three of them in the afternoon at the same time
the major indices were still trending up. That tells you something. You can
daytrade these stocks from the short side when they set up, but don’t do it
for position. Use puts, as per the CTX trade below 109 on a 1,2,3 lower top
entry. The exits can get pretty crowded in a group this extended, but at the
same time, shorts can also get squeezed and make it difficult to maintain your
position. You will get a quick knife down with the selling pressure because
no one that commits capital, such as block traders and specialists, want to
step in front of a train, so what happens is after these knifes, you can also
get some quick intraday reflexes up. This sometimes provides opportunity both
ways.
For Today
The semis, of course, remain a primary focus,
as
do the basic industry stocks where you can see the allocation change as some
money has been taken off the table after this prolonged move on some pretty
lofty expectations that have gotten ahead of reality. The extended market
speaks
for itself with over 90% of all NYSE stocks over both their 10- and 30-week
moving averages and over 90% of ALL stocks over their 200-day moving
averages.
In fact, I saw a number the other day that said over 75% of all stocks were
still above their 20-day moving average.
Price on the major indices has entered some
key
retracement zones, especially the SPX approaching the 1160 -1150 .50
retracement
levels to the 1553 and 1530 highs, so there should be no surprise to you if
price reverses in this zone or goes sideways for a period of time after any
earnings excitement subsides, if in fact, there is any.
Have a good trading day,
Kevin Haggerty
