Red Alert Zone
What Tuesday’s Action Tells
You
The travel range was non-existent yesterday,
as
the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) had a narrow-range day of 6.7 points which took the
major index traders out of the game to a great extent. The SPX closed at
1142.12, +0.2%, with the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) at 10,433, +0.4%. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) was almost unchanged at +0.1%, as was the
(
QQQ |
Quote |
Chart |
News |
PowerRating), also
+0.1%.
NYSE volume was light again at 1.19 billion,
the
volume ratio neutral at 50, as was the breadth at -218. The 5 RSI is 83.
In the sectors, the
(
SMH |
Quote |
Chart |
News |
PowerRating) was flat at
+0.1%
after a +5.1% move the previous two days. The brokers (XBD) were -0.4%
following
a +4.4% gain the previous two days.
| Â | Wednesday 6/2 |
Thursday
6/3 |
Friday
6/4 |
Monday 6/7 |
Tuesday
6/8 |
Index |
|||||
| SPX Â |
|||||
High |
1128.10 | 1125.31 | 1129.17 | 1140.54 | 1142.16 |
Low |
1118.64 | 1116.56 | 1116.64 | 1122.50 | 1135.45 |
Close |
1124.99 | 1116.63 | 1122.50 | 1140.53 | 1142.12 |
%Â |
+0.3 | -0.7 | +0.5 | +1.6 | +0.2 |
Range |
9.5 | 8.7 | 12.5 | 18 | 6.7 |
% Range |
67 | 0 | 47 | 100 | 100 |
INDUÂ |
10263 | 10196 | 10243 | 10391 | 10433 |
%Â |
+0.6 | -0.7 | +0.5 | +1.5 | +0.4 |
Nasdaq  |
1989 | 1960 | 1979 | 2020 | 2024 |
%Â |
-.09 | -1.4 | +0.9 | +2.1 | +0.1 |
| QQQÂ |
36.42 | 35.92 | 36.19 | 37.07 | 37.10 |
%Â |
-0.2 | -1.4 | +0.6 | +2.4 | +0.1 |
NYSEÂ |
|||||
T. VOLÂ |
1.25 | 1.23 | 1.11 | 1.20 | 1.19 |
U. VOLÂ |
713 | 238 | 833 | 1.09 | 577 |
D. VOLÂ |
525 | 983 | 222 | 103 | 582 |
VRÂ |
58 | 19 | 79 | 91 | 50 |
4 MAÂ |
59 | 45 | 51 | 62 | 60 |
5 RSIÂ |
85 | 56 | 66 | 82 | 83 |
ADVÂ |
1988 | 890 | 2150 | 2326 | 1518 |
DECÂ |
1304 | 2405 | 1104 | 703 | 1736 |
A-DÂ |
+684 | -1515 | +1046 | +1920 | -218 |
4 MAÂ |
+645 | -57 | +194 | +534 | +308 |
SECTORSÂ |
|||||
SMHÂ |
-2.0 | -2.5 | +2.0 | +3.1 | +0.1 |
| BKXÂ |
+0.3 | -0.8 | +0.5 | +1.5 | -.08 |
XBDÂ |
-0.5 | -1.0 | +1.9 | +2.5 | -0.4 |
RTHÂ |
+0.7 | -0.2 | -.01 | +1.6 | +0.6 |
CYCÂ |
+0.5 | -1.5 | +0.9 | +2.2 | +0.4 |
PPHÂ |
+0.1 | -.08 | +0.5 | +0.7 | +0.3 |
OIHÂ |
-0.7 | -1.4 | +0.2 | +1.5 | -0.2 |
| BBHÂ |
+1.0 | -1.5 | -.09 | -0.6 | -0.7 |
TLTÂ |
-0.3 | +0.2 | -0.6 | -.01 | +0.2 |
| XAUÂ |
-0.6 | -2.3 | -0.7 | +1.5 | -1.6 |
^next^
For Active
Traders
Not much happened in the
(
SPY |
Quote |
Chart |
News |
PowerRating)/futures.
There
was the gap down open, trading to the SPY 114.18 and 60 EMA on the 10:15
a.m. ET
bar, but the contra move was slow, tedious and sideways, but it did work its
way
north to a 114.86 close. No interest here in hanging around when the SPY
went
sideways, and there was no emotional follow-through short opportunities, so
it
was packed in early in this corner.
The SMH was a better contra move, but then
sold
it out and took a gap pullback short, which was scratched. The SMH did work
its
way up to a 38.83 high, then faded to close at 38.71.
There were, however, some good individual
stock
setups in the Dow, like
(
IBM |
Quote |
Chart |
News |
PowerRating) on an opening reversal which also reversed
the
previous day’s closing-range high, and the same trade with
(
GM |
Quote |
Chart |
News |
PowerRating).
(
MMM |
Quote |
Chart |
News |
PowerRating)
was a basic Slim Jim which formed from 9:30 a.m. – 12:00 p.m., then broke
out
above 85.17, running to an intraday high of 86.16, closing at 86.13.
(
AA |
Quote |
Chart |
News |
PowerRating)
gapped open to a 31.76 first-bar high from the previous day’s 31.32 close,
then
gave you an excellent gap pullback to the 20 EMA with a 31.36 low and then
ran
to 31.87. Not moonshots by any stretch, just some basic setups you find when
you
scroll.
Today’s
Action
The rising prices on declining volume have
pushed
the SPX to its 2.0 three-month standard deviation zone. The rally off the
200-day EMA and confluence zone is 18 days old and +6.3% low-to-high.
Yesterday’s intraday high was 114.92, with the 2.0 band just above at
115.25.
Trading above 115.41 also puts it into an RST zone. I have included the
chart,
which also highlights the negative volume divergence. Suffice to say, it is
a
red alert zone, and good intraday short setups can be taken. The
(
DIA |
Quote |
Chart |
News |
PowerRating)
three-month 2.0 band is about 105.25, while the QQQ’s is 37.60. For the SMH,
it
is about 40.10, which is also the top of its upward channel from the 05/03
34.50
low. You have the current levels where you watch price action closely, but
you
can take good intraday short setups if they present themselves.
I am doing this Tuesday night for Wednesday
morning, so I don’t have the benefit of seeing the futures game.
Have a good trading day,
Kevin Haggerty
Â
P.S. I’m pleased to announce my
new workshop, Trading with the Generals 2004, will be held at New
York’s Waldolf-Astoria on June 25 – 27. To ensure everyone gets personal
attention, I’m limiting participation to 50 live and 40 live via Internet. If
you want to attend, make sure you reserve your space early.Â
Click here.
