Reflex Zone

• January 15, 2002
• Kevin Haggerty

All
three major indices played below their previous closes all day and
closed on their lows with the late sell-off. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at
1138.40, -0.6%, just below its 50-day moving average which is the last line
remaining to be crossed on the downside. The last swing-point low is 1136.23.
The NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) closed down 1.9% at 1603.76, right at its 50-day and
10-week moving average zone. Use the 200-day SMA as a reflex rally point today,
which is 1614. The DJX
(
$DJX.X |
Quote |
Chart |
News |
PowerRating) closed down for the sixth day in
succession, -1.0% for the day, and -4.0% high to low for the past six days.

The basic industry proxy,
the
(
XLB |
Quote |
Chart |
News |
PowerRating), caught the air pocket on a gap down, hitting a low of 20.10
before closing at 20.55, -3.2% on the day. The percentage move was exaggerated
because Dow Chemical
(
DOW |
Quote |
Chart |
News |
PowerRating) was down 10.5%, in addition to the
(
$FPP.X |
Quote |
Chart |
News |
PowerRating) index, which was -2.6%.

The volume ratio was
negative again at just 26, as was breadth at -665, but overall, NYSE volume was
just around average at 1.25 billion. The
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) at -3.6% and the
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) at -2.9% were downside leaders yesterday. The BTK closed at
541.75, just below its 200-day SMA of 542.66. The previous time it got to the
200-day SMA was Jan. 4, and significant volume came into the
(
BBH |
Quote |
Chart |
News |
PowerRating)s on a
wide-range bar day, closing in the top of the range. That means we focus on the
biotechs both long and short today around the pivot moving average and watch the
intraday train closely.

The
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) was
better than the NDX and down only -0.8%, as a few of the semis finished green
and left us with some pullback setups for today. The quiet in the semis is due
in part to the slough of semi earnings this week, led by
(
INTC |
Quote |
Chart |
News |
PowerRating) today,
along with
(
RFMD |
Quote |
Chart |
News |
PowerRating),
(
TER |
Quote |
Chart |
News |
PowerRating) and
(
LLTC |
Quote |
Chart |
News |
PowerRating). On Wednesday, there is
(
AMD |
Quote |
Chart |
News |
PowerRating),
(
AHAA |
Quote |
Chart |
News |
PowerRating) and
(
NMTC |
Quote |
Chart |
News |
PowerRating), along with my favorite virus stock
(
SYMC |
Quote |
Chart |
News |
PowerRating). On Thursday you have
(
GNSS |
Quote |
Chart |
News |
PowerRating),
(
KLIC |
Quote |
Chart |
News |
PowerRating) and
(
XLNX |
Quote |
Chart |
News |
PowerRating), in
addition to
(
IBM |
Quote |
Chart |
News |
PowerRating). There will be volatility, so stay all over those intraday
chart setups to get the same train as any frontrunners with early news. Expect
some reflex rally attempts from the current inflection points today or tomorrow.

Stocks
Today

Daily chart setups today,
regardless of earnings dates, are
(
MU |
Quote |
Chart |
News |
PowerRating),
(
ISIL |
Quote |
Chart |
News |
PowerRating),
(
INTC |
Quote |
Chart |
News |
PowerRating),
(
NMTC |
Quote |
Chart |
News |
PowerRating),
(
NOC |
Quote |
Chart |
News |
PowerRating),
(
MSFT |
Quote |
Chart |
News |
PowerRating),
(
CEFT |
Quote |
Chart |
News |
PowerRating),
(
TEVA |
Quote |
Chart |
News |
PowerRating),
(
SYMC |
Quote |
Chart |
News |
PowerRating),
(
FDC |
Quote |
Chart |
News |
PowerRating),
(
FRE |
Quote |
Chart |
News |
PowerRating), and also two energies if they start to come for them today
are
(
APC |
Quote |
Chart |
News |
PowerRating) and
(
APA |
Quote |
Chart |
News |
PowerRating).

On the shortside, if they
take the biotechs south, look at
(
IDPH |
Quote |
Chart |
News |
PowerRating),
(
ICOS |
Quote |
Chart |
News |
PowerRating) and also
(
DD |
Quote |
Chart |
News |
PowerRating) and
(
ETN |
Quote |
Chart |
News |
PowerRating). 

A couple of biotechs that
I would take on the longside, if they were to trade below yesterday’s lows and
then reverse those lows to the upside would be
(
GENZ |
Quote |
Chart |
News |
PowerRating) and
(
CEPH |
Quote |
Chart |
News |
PowerRating). 

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