Programs, Not Generals
It was
a narrow-range day for the SPX
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less than 10 points, with the index trading between the upper and lower
boundaries of its linear regression channel using the one-day five-minute chart.
The intraday high was 909.89, right at the point-and-figure resistance mentioned
in yesterday’s text and also the 50-day SMA zone. From the 10:50 a.m. ET high,
the SPX traded down to 900.50, the new intraday low, taking out the 9:55 a.m. ET
low of 901.05. This was the lower boundary of the channel and guess what, it was
an RST signal bar long entry as it reversed the 901.05 prior morning low with
entry above 901.85. It rallied up to 909.58, not a homerun, but a clearly
defined entry pattern. And guess what, it all happened right at a key program
time. They took out the intraday low and then reversed it, all on the 2:30 p.m.
ET bar, giving you RST entry on the 2:35 p.m. ET bar. I have mentioned the key
program times to members of TradersWire. It was a job well done by the Program
Gang and a thinly traded market session.Â
NYSE volume was once
again light at 1.1 billion, or 85% of its average volume, and a volume ratio of
58. Breadth was +416. The Dow
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Nasdaq
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gave you a nice 1,2,3 higher bottom pattern with entry above 936.37 on the 10:15
a.m. ET bar. The NDX 100 traded up to 951.46, which proved to be the intraday
high. Program trading moved the indices yesterday, not the Generals.Â
The first star of the
sector game yesterday for you hockey fans was the
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PowerRating), which gained 4.2%,
and has run +11.5% from last Thursday’s 22 low to yesterday’s 24.55 high,
closing at 24.30. The oil service stocks stuck their heads up, with the OSX
+2.7%.Â
As I will not be in the
office on Wednesday, I’m doing this late Tuesday and don’t know whether the
futures will be gamed up for a relief rally through 9/11 and also Bush’s UN
speech on Thursday.Â
The SPX closed right at
the 20-day EMA and 50-day SMA, with the 50-day EMA up at 926 and the
head-and-shoulders neckline resistance at 930. I would anticipate some good
intraday short setups if they can take the SPX up to the 925 – 930 zone. The
SMHs have made a good short-term move from the RST entry on the daily chart and
run into the 20-day EMA at 24.85 and the 50-day SMA at 26.69, and the EMA at
27.27. If the drugs head south, watch the
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chart head-and-shoulder neckline for short entry. The
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head-and-shoulder pattern, with the downside neckline at about 77.Â
Have a good trading day
and remember all those people.
Five-minute chart of
Monday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Monday’s NYSE TICKS