Techs Lead Way In Mixed Market

  • November 11, 1999
  • Kevin Haggerty

Techs Lead Way In Mixed Market Another mixed day yesterday as the S&P 500 cash finished up 8.15 points after it faded around 1:15 PM ET, then gave a little rally starting around 3:15. The Dow was off around 20 points with only 9 of 30 stocks positive. The NDX and the techs led the way once again, as the NDX finished up 34 and the QQQs up 1 13/16. There’s no problem trading the techs because there’s absolutely no market makers in between–it’s like trading after hours. You gotta love the over-the-counter market.

With bonds closed, we have stocks alone today, so the early morning trade, and maybe a quick late-afternoon trend, might be all you see
The five techs we mentioned yesterday all had good entry and multi-point moves, led by AMCC up 6 1/8 points from entry to high, and BMCS up 7 3/8 the same way. The energies were green all day, as SLB and HAL both gave pullback second entries that were good for 1 1/4 points each. CLX gapped open at 44 and acted like a tech stock, trading to an intra-day high of 46 1/2 before closing at 45 13/16. Volume again was very strong. Thank you, Generals (they cannot hide).

Early shorts in the S&P 500 were quickly stopped out and reversed to the long side as the S&P 500 traded above your five-minute chart reference point of 1369. If any of you did both, my congratulations, and please e-mail me to let me know.



Figure 1. S&P 500 index (SPX), five-minute bar. Source: Quote.com.

The early morning (typically wrong) overreaction had the S&P futures down 10 points and bonds off about 21 ticks before bonds turned around and cut the loss to only 7 ticks late in the day. After 1:00 PM, the shorts probably covered positions in the bonds before today’s holiday. With bonds closed, we have stocks alone today, so the early morning trade, and maybe a quick late-afternoon trend, might be all you see (with a lot of trading range in between).

You gotta love UPS, a new issue yesterday. They came with a little over 100 million shares and 81 million shares traded yesterday. There was a lot of flipping going on by institutions as the stock came at 50 and traded to 70. Windfall day trades for many of the big guys. It’s a wonderful business.

Pattern Setups In the drugs, Merck [MRK>MRK] and Schering-Plough [SGP>SGP] set up. Also watch International Paper [IP>IP] and Dow Chemical [DOW>DOW] if they decide to nibble at the cyclicals.



Program Trading Numbers
BuySellFair Value
6.854.405.60
But the stocks that are really flying are the ones without market makers, who have disappeared into the sunset, leaving the hedge funds and institutions with total control of these stocks, making them do whatever they want them to do. You might as well get on board. Stocks to watch: Vignette [VIGN>VIGN], JDS Uniphase [JDSU>JDSU], Xilinx [XLNX>XLNX], Legato [LGTO>LGTO], Voicestream Wireless [VSTR>VSTR], Echostar Communications [DISH>DISH] and Lam Research [LRCX>LRCX]. These are all flyers. If you get entry, take them; you might also be in a situation where you get second entry. It’s usually second entries, especially after any early morning enthusiasm.

If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his series of tutorial articles.