Sequence Trading
This
was recorded Wednesday night, July 3, only because there were some excellent
trades in both the SPX, NDX and SMH you should be aware of if you didn’t take
them.
Going
into yesterday, you were aware
that the indices and the SOX were in the extreme band zone, also that the shorts
might get antsy and in turn, programs could give it a boost into the holiday.
That’s what happened. After the early up, the SOX traded down to an intraday low
of 343.72, which was the 1.27 extension of the first leg up. The 2.0 longer-term
band mentioned in yesterday’s commentary was 345. You had a signal bar entry
with a top-of-the-range close above 345.29, at which point you bought SMHs. If
you didn’t take that, there was a 123, then a breakout from an ascending
triangle to new intraday highs. You should have caught at least one of them.
The
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was
easier, giving you three excellent defined entries. You were aware of the
September lows at 944.75, also the 944 2.0 longer-term band with the 3.0 below
at 912. This zone was alive. After the first leg up, you got a sequence entry on
the 2.0 Fib extension down to the intraday low of 932.87. You had a narrow-range
Doji signal bar on the SPY and with entry above 93.85 which is equivalent to
935.31 on the SPX. You can use either the SPYs or futures for any of these
trades. The second entry was a 123 higher bottom with entry above 937.79 on the
SPX. The third entry was out of the symmetrical triangle above 941 on the 1:30
p.m. bar. The SPX rallied up to 953.21.
The NDX also had a
sequence extension setup, followed by a 123.
I don’t read anything
into the pre-holiday trading. It wasn’t a surprise to get some upside movement
from these levels and certainly there was some short covering and program
acceleration. The Street will be light on personnel from both the buy and sell
sides on Friday, so you can expect stocks to act like beach balls.
Have a good holiday.