Short Into Resistance, And Only Take Defined Setups
What Friday’s Action Tells
You
NYSE volume of 876 million shares says it all
as
the market grinds into Labor Day and the Republican Convention. In fact,
NYSE
volume averaged just 1.04 billion shares for the week. The rising price on
declining volume continued on Friday, as the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at
1107.72, +0.2%, with the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) also at +0.2% to 10,195. The
Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), 1862, was +0.5%, as was the
(
QQQ |
Quote |
Chart |
News |
PowerRating) to 34.56. The SPX and
Dow
were both about +0.9% on the week, while the QQQ was +1.7% and Nasdaq +1.3%.
The
volume ratio on Friday was 67 and breadth +1192.
In the sectors, the
(
SMH |
Quote |
Chart |
News |
PowerRating) continued its
alternate day bounces, but going nowhere in price. Last week it was +1.0%,
-2.3%, +1.1%, -1.0% and +1.1% on Friday. The
(
OIH |
Quote |
Chart |
News |
PowerRating) was only +0.5% on
Friday,
but the four focus energy stocks in Friday’s commentary provided daytraders
good
opportunity.
For Active
Traders
You were ready for the same type of energy
setups
with the daily chart ranges as you had on Thursday. We were not
disappointed,
and it certainly made the trading day, as the SPX daily range of just 5.1
points
didn’t provide much
(
SPY |
Quote |
Chart |
News |
PowerRating) or futures action.
(
AHC |
Quote |
Chart |
News |
PowerRating) came out of its daily chart range,
and
I have outlined the five-minute-chart entries as price rallied to a 79.50
intraday high, closing at 79.31. After trading above the previous day’s
77.70
high (first entry) to 78.04, you got a second entry from the Slim Jim above
that
level. If you didn’t take entries one or two, then you got a third entry
that
carried to 79.50 out of the second Slim Jim above 78.49. AHC closed at 79.31
above all of its EMAs and right at the 80.10 low close minor resistance. It
was
a +2.3% low-to-high intraday move above the first entry level, and +1.9%
above
the 78.04 Slim Jim entry.
I have also included the five-minute charts
of
(
DO |
Quote |
Chart |
News |
PowerRating) and
(
RDC |
Quote |
Chart |
News |
PowerRating), both of which also made continuation moves out of
their
daily chart consolidation ranges.
Today’s
Action
We have the August month-end, the Republican
Convention, Labor Day Holiday, increased terror alert, and it is also a key
longer-term time-zone week. Both the SPX and QQQ have traded to initial
resistance levels, and I have included the QQQ daily chart. Net net net,
that
obviously makes you start the week with a very open mind and daytraders
should
only take the defined setups. The bias is still short into the resistance.
Have a good trading day,
Kevin Haggerty
