Range Resolution
The
previous day’s closing range failed to
commit to play as the major indexes gapped up on the open and didn’t fill it, a
sign of strength. It is the third time to the top of the range for the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) and a fourth time through means a quick move to the 1130-1135
confluence of resistance.
This a busy week with
Greenspan’s rate cut in addition to a few cycles coming together today through
Friday. Today is a minor cycle date, the 7th is a Fib pivot date in time, and
the 9th is a 32-week cycle date, in addition to a 233-day pivot date also from
the May 22 high. I like to be aware of the various dates because things seem to
happen when several come together just as it did in September which had a major
and four strong minors come together in the same week, which was the beginning
of this rally. It is my guess that the trading range will be resolved this
week.
The NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating)
made a new high close out of the range yesterday at 1480.21. The high close in
the range for the SPX is 1104.61, and the close was 1102.84 yesterday. The high
of its range is 1110.61. From a sector view, the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) runs into
overhead resistance from a previous trading range at 530, which is also the .618
retracement zone for the Aug. 27 613 high. The SOX has advanced 48% in just 27
days, while some individual semis like
(
NVDA |
Quote |
Chart |
News |
PowerRating),
(
QLGC |
Quote |
Chart |
News |
PowerRating),
(
GNSS |
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Chart |
News |
PowerRating) and
(
ISIL |
Quote |
Chart |
News |
PowerRating) have doubled. QLGC closed at 44.60, up against its 200-day EMA at
45.60. The SOX is long in the tooth in its rally.
The
(
SMH |
Quote |
Chart |
News |
PowerRating)s closed at
39.83 vs. the .618 retracement at 39.90 with the 100-day EMA at 40.24 and
trading range resistance and the .786 level up at 43. The next best position
trade in the semis will be from the short side. On an intraday basis, we could
just keep riding the continuation train, but I suggest taking fast profits and
moving stops to breakeven, and as always, be flat at night.
Yesterday, the price
increase in the indexes was on average volume at 1.193 billion shares on an
improved volume ratio at 73 and an expansion of breadth at +974. The
(
$IIX.X |
Quote |
Chart |
News |
PowerRating) and networking indexes led the techs yesterday at +5.3% and
+5.9%, while the
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) was +4.6%. The SOX rose 2.8% and has now put in
four straight up days at +16.2%, just enough to suck in more position longs.
Stocks
Today
Pre-Greenspan trading is
usually dull, and then we have been getting an announcement overreaction
followed by a counter-reaction move. Keep your trades to scalp levels with tight
stops prior to the Fed announcement.
Some stocks to look at
that set up on the daily charts from the longside: in the biotechs,
(
PDLI |
Quote |
Chart |
News |
PowerRating),
(
ENZN |
Quote |
Chart |
News |
PowerRating),
(
DNA |
Quote |
Chart |
News |
PowerRating),
(
TKTX |
Quote |
Chart |
News |
PowerRating), and also the
(
BBH |
Quote |
Chart |
News |
PowerRating)s, which re-crossed
and closed above its 200-day EMA yesterday.
In the semis,
(
MXIM |
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Chart |
News |
PowerRating),
(
MCHP |
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Chart |
News |
PowerRating),
(
ELNT |
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Chart |
News |
PowerRating) and
(
KLAC |
Quote |
Chart |
News |
PowerRating).
Other stocks are
(
FRE |
Quote |
Chart |
News |
PowerRating),
(
CHKP |
Quote |
Chart |
News |
PowerRating),
(
GDT |
Quote |
Chart |
News |
PowerRating) and
(
EMC |
Quote |
Chart |
News |
PowerRating).
Careful on the breakout
of the trading ranges today. The whole world is waiting to play the
(
SPY |
Quote |
Chart |
News |
PowerRating)s,
(
QQQ |
Quote |
Chart |
News |
PowerRating)s and
(
DIA |
Quote |
Chart |
News |
PowerRating)s. You might get a quick pop out of there, and then you
might get a short sale, and then you might get a re-entry on a second entry long
if that happens, but with Greenspan this afternoon, anything can happen
program-wise and the futures will be all over the place.
FYI: The covered combos
in
(
AMD |
Quote |
Chart |
News |
PowerRating),
(
CSCO |
Quote |
Chart |
News |
PowerRating) and
(
EMC |
Quote |
Chart |
News |
PowerRating) are doing just fine.
Have a good trading day.
Five-minute chart of
Monday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Monday’s NYSE TICKS
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