Program Acceleration
After
an opening reversal for
the S&P 500
(
$SPX.X |
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PowerRating), it was
trend down for the day. Continuation entries prevailed. There was one valid
contra long attempt at the .50 retracement level to the 7/26 low with entry
above the signal bar’s high of 979.16 which was the 1:10 PM bar on your
five-minute chart. This move only ran 4.5 points before the wave of sell
programs started on the 2:25 PM bar and then again on the 3:25 PM bar. The time
of the programs should sound familiar to most of you.
Between the programs and
July Fourth terror alerts, the indices got a big push down which will probably
provide a decent reflex today or tomorrow, especially if this early red carries
into the opening. You should always play the continuation entries but you also
must be ready to enter the counter trend setups at inflection zones, because
they are extremely profitable moves as you have seen over the past few months.
Since the May high of
1107 for the SPX and 1351 on the Nasdaq
(
$NDX.X |
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PowerRating), there hasn’t been more than a two-day move off the previous
swing point low. Yesterday’s program acceleration took the Dow
(
$DJX.X |
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PowerRating)
down -1.4%, SPX -2.1%, Nasdaq -4.2% and NDX 100 -1.5%. The small caps took the
down side also, with the RUT 2000 -3.2%.
New York Stock Exchange volume
decreased significantly to 1.4 billion with a volume ratio of 20 and breadth
-950. Nasdaq volume was distorted due to WorldCom. The one-day short-covering in
the BTK ended with a -7.3% slam yesterday. All of the tech indices were big red
with the SOX -5.2% and it continues to provide great travel range, both long and
short. The XAU rebounded +5.2% after the last four days down.
The Semis and biotechs
are two sectors where the average daily range is still 2 points or more for most
stocks, so your scrolling focus has to be on these sectors on a daily basis.
Some of the defense stocks like
(
NOC |
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(
GD |
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(
ATK |
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same. A few other similar range names to focus on might be
(
WLP |
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(
THC |
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(
PG |
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(
IBM |
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(
MMM |
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(
ACO |
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(
KSS |
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(
EBAY |
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(
SNPS |
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(
CDWC |
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(
INTU |
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(
ESRX |
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PowerRating).
Keep your helmets on and
try to keep taking what you see and don’t get too cerebral. It’s dangerous for
your pocketbook. It’s a daytrader’s market right now and especially the sequence
traders which bridge all market scenarios.
Have a good trading day.
Five-minute chart of
yesterday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
yesterday’s NYSE TICKS