Take Advantage Of Any Early April Money
What Thursday’s Action Tells
You
The XLE sequence setup on a retracement to
the
50-day EMA is +5.4% in two days, low to yesterday’s 43 high, closing at
42.87.
It is a mirror image volume-wise with 24.3 million shares trading on 03/23
as
the “2” point (42.05) was taken out and then 24.2 million shares
on Wednesday’s
retracement to the 50-day EMA. It looks like the Generals changed their
minds,
but if they did, it was a nice chop they took out of it. If you did not
trade
the XLE that day, there were similar trades in
(
XOM |
Quote |
Chart |
News |
PowerRating),
(
CVX |
Quote |
Chart |
News |
PowerRating) and
(
COP |
Quote |
Chart |
News |
PowerRating) which are 44.6% of the XLE index weighting. Many of the other
energy
stocks, including the
(
OIH |
Quote |
Chart |
News |
PowerRating) — oil service stocks — also had a similar
sequence setup. Yesterday’s XLE volume was 12.5 million shares. Did you
scale
sell some of your position to get started? It makes the rest of the trade
must
easier to manage when you know you will have a plus trade unless there would
be
a “stop trading” situation for some reason or another. 43.50 is
the upper
channel line, so selling a percentage of your position into the 43.00 –
43.50
level makes sense for a short-term trade and still retain about 60% of the
original position with trailing stops.
It was month-end yesterday and the market
action
was choppy and sideways in a 5 point range for the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
between
1184.53 – 1179.49, so that says it all. NYSE volume was 1.72 billion shares
with
the volume ratio above neutral at 57 and breadth remaining positive at +753,
in
spite of the soft last half-hour as the SPX closed at 1180.57, -0.07%. The
Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) was -0.3% led by
(
AIG |
Quote |
Chart |
News |
PowerRating), -3.1%,
(
MCD |
Quote |
Chart |
News |
PowerRating), -1.6%, and
(
WMT |
Quote |
Chart |
News |
PowerRating), -1.4%. In the sectors, the semis gave back 50% of Wednesday’s
+2.2%
day with the
(
SMH |
Quote |
Chart |
News |
PowerRating) -1.1%. The cyclicals and brokers were both +0.6%,
while
the RTH and PPH were each -0.6%. The leader was, of course, the OIH at +3.2%
and
the XLE +2.0%.
The focus now is the early April money, and
if it
doesn’t come in, some more weakness can show up quickly. This would shake
the
tree for sure, but you would still start the month on the plus side, and
that’s
not a bad thing.
Have a good trading day,
Kevin Haggerty
P.S. I will be
referring to some charts here:
www.thechartstore.com in the future.
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