Slam Dunk

• March 13, 2002
• Kevin Haggerty

Yesterday’s
action was a mix of negative
market dynamics, as the up-volume/down-volume ratio and breadth were negative
all day, and there was price persistence in the indices to the upside after a big red gap
down opening. The intraday low for the SPX
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$SPX.X |
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$INDU |
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was on the first bar. Needless to say, there were ample volatility band setups.

The NDX
(
$NDX.X |
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that is when the programs pushed the indices higher into the close. If you
noticed during the program rally, the up-volume almost went positive, but then
there was a negative 100 million volume swing right after the gang took the
index price up. Their work was completed and once again, legged into the trade
correctly. FYI: There was a big increase in put volume in the afternoon prior to
the $100 million downswing. That’s called slam dunk, folks. They got you again.

The price persistence
yesterday sets the table for more up today in the indices. The SPX, after 15
days of price persistence, only had one pullback day during the stretch where
you had a lower high and lower low. This has kept shorts from getting much back
and has forced more money off the sidelines. This scenario is perfect for
premeditated program attacks, especially in conjunction with the February
month-end and new money reinvestment period.

The
(
$SOX.X |
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(
$XBD.X |
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and
(
$BTK.X |
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(
$NWX.X |
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SOX was down for the second consecutive day at -2.7%, and they will certainly be
a focus in today’s trading plan for intraday long setups. The
(
$BKX.X |
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(
$RLX.X |
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(
$OSX.X |
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(
$DRG.X |
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green. The Dow and SPX were each up 0.2%, while the NDX, led by the semis and
networkers, was down -2.1%. NYSE volume was 1.3 billion, volume ratio 46, and
breadth negative at -119.

The bias is up today
after the recovery rally/mark-up, and be ready for the upside program push from
2:00 on. Check for those Slim Jims.

Stocks
Today

On the longside from the
daily chart setups,
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PG |
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(
GD |
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(
NOC |
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(
WY |
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GE |
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(
MMM |
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(
FITB |
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(
VARI |
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(
AMGN |
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pre-opening. They got some approval, so that will probably negate that,
certainly on a continuation entry.

Also,
(
JDEC |
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(
KRON |
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SIAL |
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(
VAR |
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In the semis, to focus on
for intraday setups, they don’t set up on the daily charts, are
(
KLAC |
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(
BRKS |
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(
AMAT |
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Have a good trading day.

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

Five-minute chart of
Tuesday’s NYSE TICKS