Resistance

October 3, 2001
Kevin Haggerty

The
(
$SPX |
Quote |
Chart |
News |
PowerRating)
and Dow with a 3:00 p.m. bounce finished
in the plus column, both advancing 1.3%. The NYSE volume was about 10% above its1
average at 1.278 billion, a volume ratio of 69, and breadth was excellent at
+1022 as some new quarter money has been put to work by the Generals, which
usually happens for the first few days of a new quarter.

The SPX has gained 11.3%
from the Sept. 21 low to yesterday’s high of 1051.33 in eight days. It closed at
1051.33. This puts it up against the 1055 20-day EMA, which now becomes a
short-sale pivot. If it runs through it into Friday, then short entry can be
taken below the low of any new high day. At best case, this is leg one action in
any new reversal move. It will test the 944.75 low. Long positions should be
avoided until the third leg begins with a move above pivot point 2 of a 1 2 3,
whenever that develops. The .50 retracement to the 1186.85 high is 1066. I think
I’ve made my point.

The NDX is mired down in
sideways action telling us nothing good is happening yet. A volatility event due
to the Middle East is ever present. The Dow has advanced +11% from the 8062
Sept. 21 low with a 20-day EMA just above at 9082. It closed at 8951.

We had two good trading
opportunities yesterday in the S&P futures (SPZ1). The first was a 1 2
3 short below the eight-period moving averages of the high and low at the 1044
level on the SPX as it traded down to 1033. From there, we got a .618 Fib
retracement in an uptrend as the 3:00 p.m. knife up carried to 1050. Entry was
above 1037 on the SPX. You either played futures or SPYs. This retracement was a
downtrend when you look at yesterday’s action, but when compared to Monday’s
1027 low, it was just a pullback in an uptrend. I will include both charts
tomorrow for your records.

This morning we start
with early red as the S&P futures are -12, NDX -20, and Dow -100.

Stocks
Today

Have a good trading day.

The chart above details a trade
from Monday that I outlined in yesterday’s
text. The blue lines are the eight-period MAs of the high and low. The red
is the five-period EMA.

Five-minute chart of
Tuesday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Tuesday’s NYSE TICKS

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Resistance

BUY THE FEAR, SELL THE GREED

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