Sweet December?
Taking
out the Enron
(
ENE |
Quote |
Chart |
News |
PowerRating) skew, the NYSE
volume was at its average while the Nasdaq volume was the lightest of the past
five trading days. Friday was a narrow-range day and all of the major indices
ended the week still locked in a four-week, narrow-range pattern that will
certainly be resolved shortly. The
(
$DJX.X |
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Chart |
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PowerRating),
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) and
(
$NDX.X |
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News |
PowerRating) are all trading just below
their 30-week EMAs which is a good pivot for shorts at a declining trendline
and/or upside pivot if the Generals make a year-end push to the upper confluence
of resistance which for the SPX is 1174-1208.
There should be some decent
volatility both ways this month. For example, last year, the
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) had
declined from 1439 on 11/6 to 1295 on 11/30. It then rallied to 1389 on 12/11, then declined to 1254 on
12/2/00. It then rallied into year end, to a 1340
high of 12/29, closing the year at 1320.
This year is certainly a
different scenario, as the SPX has rallied from a 944.75 low on 9/21 to an
1163.38 high on 9/27/01, for a +23.1% move in just 47 trading days low to high.
There hasn’t been more than a three-day pullback during this entire move which
emanated from a major alert zone in a dominant cycle period at an extreme
oversold condition. Many recognized it but failed to play it, not even with an
options strategy — which amazes me.
It also why sequence
trading with the proper strategy has no peer, because the herd mentality will
never change and can’t be de-programmed. There
is some early red for the futures and it would be very accommodating if it
continues into a very weak opening, giving us some Trap Doors and Volatility
Band plays. Those of you that are taking the Volatility
Band service can sit there and cherry pick whichever stocks get stretched
the most during an early decline. The
first of a series of examples on utilizing the Volatility Bands is
complete and should be posted ASAP for subscribers.
Stocks
Today
Regardless of the early red, we prepare the daily chart long
setups from Friday because they may very well be your best Trap Doors after any
early decline.
In the biotechs:
(
IDPH |
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PowerRating),
(
PDLI |
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News |
PowerRating),
(
ICOS |
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PowerRating),
(
DNA |
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Chart |
News |
PowerRating),
(
GENZ |
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Chart |
News |
PowerRating),
(
OSIP |
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Chart |
News |
PowerRating),
(
MEDI |
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Chart |
News |
PowerRating) and
(
SEPR |
Quote |
Chart |
News |
PowerRating).
In the semis:
(
MXIM |
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Chart |
News |
PowerRating),
(
NVDA |
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Chart |
News |
PowerRating) and
(
QLGC |
Quote |
Chart |
News |
PowerRating).
In the basics or multinationals:
(
AL |
Quote |
Chart |
News |
PowerRating),
(
DOW |
Quote |
Chart |
News |
PowerRating),
(
DP |
Quote |
Chart |
News |
PowerRating),
(
NOC |
Quote |
Chart |
News |
PowerRating),
(
IP |
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Chart |
News |
PowerRating) and
(
GP |
Quote |
Chart |
News |
PowerRating).
In the energies, if they come based on the bombings in Israel, I
would look at:
(
BJS |
Quote |
Chart |
News |
PowerRating),
(
SLB |
Quote |
Chart |
News |
PowerRating) and
(
NBR |
Quote |
Chart |
News |
PowerRating).
Other stocks are:
(
VARI |
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Chart |
News |
PowerRating),
(
BRCD |
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Chart |
News |
PowerRating),
(
AZO |
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Chart |
News |
PowerRating),
(
LTR |
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Chart |
News |
PowerRating),
(
PMCS |
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Chart |
News |
PowerRating),
(
BRL |
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Chart |
News |
PowerRating),
(
LAB |
Quote |
Chart |
News |
PowerRating) and
(
EMLX |
Quote |
Chart |
News |
PowerRating).
On the short side, I’d stay with the proxies for both the
sectors and the indices.
Have a good trading day.
Five-minute chart of Friday’s S&P 500 (SPX) with 8-,
20-, 60-
and 260-EMAs
Five-minute chart of Friday’s NYSE Ticks
If you
would like to receive Kevin Haggerty’s Daily Volatility Bands to identify price
reversal levels in stocks, click
here.