Take What They Give You

The
Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating)
played to the script

yesterday with continuation short entries early as the previous day’s lows were
passed, and then quickly reversed to the upside in virtually all of the momentum
stocks we have been following. 


The NDX took out the 8/3
3342 low, trading down to an intraday low of 3292, before reversing that low and
closing at 3453, +3% on the day. After the intraday low, the NDX trended higher
all day with
higher highs and
higher lows. If you played some of these reversals of the previous day’s low,
you had another dynamite day. 


There is very often a sharp
reflex rally after three wide-range-bar down days.
The
NDX closed in the top of its range, so we are looking for a change in direction,
which would be trading above yesterday’s high and it wouldn’t be confirmed until
it closes above that high. The buyers must prove they are real and confirm 3392,
a swingpoint low, which is just below .618 RT of 3375 and above the .786 RT of
3165. If you are long the OTC market, 3342 becomes your stop reference point.


The S&P 500 had the
same kind of trending day as the dynamics were neutral, with total volume of 1.2
billion shares, a volume ratio of 52, and decliners over advancers by -311.
Institutional activity certainly picked up with the block numbers at 25,907.
Much of that increase came in the cyclicals as there was expansion of price and
range on increased volume as the Generals multiply at the entrance to buy some
of the down-and-under stocks.


The Dow traders will be
looking to jump on the DIAs once again, breaking above the 200-day EMA of
108.17, and then the 50-day EMA of 108.91. They can quickly run to the 110 3/4 –
111 level, if there is cyclical continuation.


The early screen is
primarily red for the chosen ones in the funny-money Instinet trading, while the
S&P futures are up about 4 points.














face=”arial, helvetica”>(December Futures)


Fair
Value


size=2>Buy


size=2>Sell


17.00


18.30


15.80


Pattern
Setups


If we get any kind of continuation on
the long side and any kind of follow through, the following stocks set up:



(
NTAP |
Quote |
Chart |
News |
PowerRating)
,
(
NEWP |
Quote |
Chart |
News |
PowerRating)
,
(
VTSS |
Quote |
Chart |
News |
PowerRating)
,
(
BRCM |
Quote |
Chart |
News |
PowerRating)
,
(
GMST |
Quote |
Chart |
News |
PowerRating)
and
(
MXIM |
Quote |
Chart |
News |
PowerRating)
.


Also
(
JNPR |
Quote |
Chart |
News |
PowerRating)
,
(
BRCD |
Quote |
Chart |
News |
PowerRating)
,
(
CIEN |
Quote |
Chart |
News |
PowerRating)
,  
(
AMCC |
Quote |
Chart |
News |
PowerRating)
,
and
(
IDTI |
Quote |
Chart |
News |
PowerRating)
.


 In the biotech area:
(
PEB |
Quote |
Chart |
News |
PowerRating)
,
(
ABGX |
Quote |
Chart |
News |
PowerRating)
and
(
PDLI |
Quote |
Chart |
News |
PowerRating)
. 


If they continue for the semis, look
to
(
MU |
Quote |
Chart |
News |
PowerRating)
,
(
TXN |
Quote |
Chart |
News |
PowerRating)
and also
(
ADI |
Quote |
Chart |
News |
PowerRating)
.


Have a good trading day.


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