Semi Reflex
The
major indexes made up a good portion
of the Tuesday post-Fed dive, with the Dow showing the most positive divergence
during the rally which started just after 11:00 a.m. The Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating)
made a Double Bottom, while both the Dow and S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating) had only Fib
retracements before resuming the afternoon trend.Â
The New York Stock Exchange
volume picked up
to 1.116 billion, the most in the last five days, but still just right on the
average volume number. We’d like to see more. The
volume ratio was good at 63 and breadth positive at +581. There’s no question
that there is rotation into more of the better-balance-sheet blue chips and
continued exodus from the decimated techs that they prefer not to have too much
of at report card time, which is end of month. Many
of these Basics have been ringing the register daily for the daytrader if you
have been able to adjust to the smaller daily range.Â
The Nasdaq traded just
under 90% of its average daily volume at 1.5 million, with a volume ratio of 61
and breadth positive at +471. What I did like about yesterday was the up-volume
to down-volume ratio stayed positive all day, even when the major indexes went
red in the morning. The Semis, Biotechs and Financials were green all
day, along with many of the Basics.
The sectors that were red
most of the morning and early afternoon were: the
(
$DRG.X |
Quote |
Chart |
News |
PowerRating),
(
$FPP.X |
Quote |
Chart |
News |
PowerRating),
(
$CEX.X |
Quote |
Chart |
News |
PowerRating) and
(
$RLX.X |
Quote |
Chart |
News |
PowerRating). By 1:30
p.m. to 2:00 p.m., all sectors turned green except the
(
$FPP.X |
Quote |
Chart |
News |
PowerRating) and the
(
$OSX.X |
Quote |
Chart |
News |
PowerRating), which had
been very strong until turning red late in the day. You know we need the Semis
strong if we are going to get more than another flash rally and they had an
excellent day with the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) +5.2% and the
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) +4.8%.
There are many good long
setups today from the daily charts and all three major indexes closed in the top
of the range. Both the NDX and SPX are set up for RSTs if we get continuation
today. The ideal opening would be flat and slightly down, which doesn’t attract
any institutional selling, and then we have a good shot for continuation long
entries. As I’m doing this, the
S&Ps are off 380 and the NDX futures off 5.5.
|
(September
|
||
|
Fair Value
|
Buy
|
Sell
|
|
2.55
|
 3.70 |
|
Stocks
Today
It’s easier to get the
rhythm of a market than a stock, so look at the Qs, the Diamonds (DIAs) (which
had their best volume up day since May 16), and it’s also a good way to play the
Basics, in addition to the Spiders (SPDRs). They are all set up for continuation
entry.Â
In this fragile market, I
still think second entry is best, especially during those first few bars when
the futures probe the highs and lows. In the Semis which had better-than-average
volume in most of them, look at:
(
MCHP |
Quote |
Chart |
News |
PowerRating),
(
KLAC |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
NVDA |
Quote |
Chart |
News |
PowerRating),
(
TXN |
Quote |
Chart |
News |
PowerRating),
(
ELNT |
Quote |
Chart |
News |
PowerRating),
(
ADI |
Quote |
Chart |
News |
PowerRating),
(
LRCX |
Quote |
Chart |
News |
PowerRating),
(
NSM |
Quote |
Chart |
News |
PowerRating),
(
NVLS |
Quote |
Chart |
News |
PowerRating), and
(
MU |
Quote |
Chart |
News |
PowerRating) (which set up in an RST).
In the Biotechs:
(
IMCL |
Quote |
Chart |
News |
PowerRating),
(
BGEN |
Quote |
Chart |
News |
PowerRating),
(
GENZ |
Quote |
Chart |
News |
PowerRating) and
(
CHIR |
Quote |
Chart |
News |
PowerRating).
Other stocks to focus on
are{
(
BAX |
Quote |
Chart |
News |
PowerRating),
(
SIAL |
Quote |
Chart |
News |
PowerRating),
(
GILD |
Quote |
Chart |
News |
PowerRating),
(
UNH |
Quote |
Chart |
News |
PowerRating),
(
THC |
Quote |
Chart |
News |
PowerRating) and
(
HCR |
Quote |
Chart |
News |
PowerRating) (if they continue to press their bets in
those healthcare stocks). Also
(
CAH |
Quote |
Chart |
News |
PowerRating),
(
CEFT |
Quote |
Chart |
News |
PowerRating) and
(
FDC |
Quote |
Chart |
News |
PowerRating). A few others are
(
FITB |
Quote |
Chart |
News |
PowerRating) and
(
CMA |
Quote |
Chart |
News |
PowerRating)
(the Financials did well for us yesterday), along with
(
CSX |
Quote |
Chart |
News |
PowerRating).
On the short side, if we
get a little red, take a look at:
(
BMET |
Quote |
Chart |
News |
PowerRating),
(
AIG |
Quote |
Chart |
News |
PowerRating),
(
CB |
Quote |
Chart |
News |
PowerRating) and also
(
SBC |
Quote |
Chart |
News |
PowerRating).
Have a good trading day.
Five-minute chart of
Wednesday’s S&P 500 with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Wednesday’s NYSE TICKS
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