The Beat Goes On
It was
a mixed bag for the major indices on
very light NYSE volume of 982 million, which is just 70% of its average, a
volume ratio of 44, and breadth -344. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was almost flat,
with the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) ending +0.8% and the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) -1.2% on
only 60% of its average volume.
The semis were the
downside sector leaders at -4.0%, with the
(
SMH |
Quote |
Chart |
News |
PowerRating)s barely holding the 22
level, closing at 22.28. The intraday low was 21.89. The retail index closed
+0.7%, and oil service +1.4%. The defense stocks ran early, as
(
NOC |
Quote |
Chart |
News |
PowerRating) and
(
ATK |
Quote |
Chart |
News |
PowerRating) held most of their gains at day’s end.
The SPX gave us a Flip
Top short entry below 886.44, which traded down to the 878.91 intraday low vs.
the 878.52 1.618 extension of Friday’s afternoon leg from 883.67 to 892. This
set up another trade. For sequence traders, you then got an early 1,2,3 close
entry above 880.79, then a 1,2,3 higher bottom entry above 881.81, which was
after a Fib pullback. The 1,2,3 trend entry was above 883.50.
The first entry was on
the 11:15 a.m. ET bar using your five-minute chart with confirmation of an
8,17,9 MACD crossing. Check your two-day five-minute chart for the SPX, and you
will see how geometrically the index has been trading. I hope you sequence
traders are all over it. Since Friday, the SPX has bumped up against the 893
zone four times, which is the .38 retracement from 965 – 776. It closed at
891.10 with an intraday high of 891.84. The seven trading legs for the two days
have all been between 1% and 1.5%. The sequence went +1.5%, -1.0%, +1.4%, -1.0%,
+1.0%, -1.5% and +1.5%. If you are interested in sequence trading and 1,2,3s,
then save the two-day five-minute chart. It’s a lesson.Â
At the close on Monday,
you must frame the 878.91 – 891.84 afternoon trend up leg so you are ready for
the Fib retracement levels of awareness and Fib extensions if the market takes a
hit on Tuesday. Should the SPX trade up early, then you adjust to the new high
for your retracement level calculation. Most of you should have software that
does it, but if not, it only takes a few seconds by hand.Â
The before-mentioned part
was done after yesterday’s close, but I walked in this morning at 6:00 a.m. ET
and we have the futures up big following the Iraq “whatever it might mean
.” Guess this means Trap Doors from the overreaction up, and you now must
do your Fib extensions up from the 892 – 878.91 early down leg yesterday. This
results in the 1.618 Fib extension at 900, 2.0 at 905, 2.24 at 908, and the
2.618 extension at 913. Just above that is the 925 – 930 resistance zone where
the SPX has failed twice before. The Hussein Hustle is just one more thing to
add to our current volatility events mentioned in yesterday’s
commentary. Be careful.
Have a good trading day.
Five-minute chart of
Monday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Monday’s NYSE TICKS