Some Super Moves In These Stocks

  • May 7, 2003
  • Kevin Haggerty

There was a steady up
all day for the major indices as the SPX
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traded to a 939.51 high before an RST sell pattern
emerged and it traded down to 928.88 starting on a 2:40 PM bar. The 925 level
held again and the SPX traded up into the close of 934.39, +0.9% for the day.

The high close since the 962.69 close on Aug 22 
is 938.87, just before the one-day spike to the 954.28 intraday high on December
2, which closed that day down at 934.53. The Dow
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+0.7%, while technology remains the leader and the Nasdaq
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QQQ
(
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The SMH
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SMH |
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+1.4%, were strong together once again, while the CYC
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+1%, all joined on the green side.

NYSE volume was 1.6 billion, volume ratio 74, and
breadth +1083.

The SPX closed just over its +2.0 standard
deviation band on the six-month daily chart with the +3.0 band closing at about
965. This current rally started at 788.90, just below the -2.0 band and has
carried to the +2.0 band and in the caution zone where there can be a quick air
pocket as I have mentioned over the last several days

The SPX is +6.2% for the year and according to
the stock almanac, there hasn’t been a losing third year of a presidential term
since 1939. I hope those of you still waiting for the Sun, Moon, and stars
rather than having taken some advantage of the significant retracement zones at
much lower levels get a chance to finish green this year.

Going forward, you will be trading the markets,
not investing in the market. It doesn’t appear we will be getting another cycle
of high earnings growth with low inflation such as we have had from 1982 through
the year 2000. Hopefully the powers that be can keep us from deflation, which
talk I see is popping up in the media again. A trading range market would result
from any mid-to-high growth and high inflation. Options strategies would be a
necessity for good returns in that kind of environment.

The scroll list of big-cap stocks with a 20-day
EMA greater than the 50, which is greater than the 200, with positive DMI, has
provided many excellent daytrading setups during this rally. But there have also
been some super moves in some of the NDX low-priced stocks that were “going out
of business” in October. Two of them showed up on today’s screen that have been
basing on the weekly chart showing significant increase in volume are Siebel
(
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and JDS Uniphase
(
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And sooner or later Sun Micro
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take off as it has broken out of a weekly symmetrical triangle on volume. Some
stocks like Express Scripts
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ESRX |
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SIAL |
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watched closely as they are in their three-year high trading ranges and qualify
as what I call Roofers.

Have a good trading day.

Kevin Haggerty

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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