The Best Part Of Yesterday’s Rally
Yesterday was an event day, as
the SPX
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EMAs, joining the
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200-day EMAs are SPX 905, Dow 8483, QQQ 26.51, and SMH 26.33. NYSE volume was
good at 1.6 billion, especially the volume ratio at 85, with 1.36 billion up and
only 243 million down. Breadth was +1505. The SPX gained +2.2%, NDX
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PowerRating) +2.0%, and the Dow +1.9%, which closed at 8485, just above its
200-day EMA of 8483. The SPX’s near-term magnet discussed in recent commentary
of 895.90 was taken out on a closing basis, in addition to the 904.89 intraday
high of this rally. The magnet for the Dow are the 8522 and 8520 highs.
The best part of
yesterday’s rally was the fact that all of the major sectors beat the major
indices. The financials were strong, with the XBD +3.5% and the BKX +2.7%. In
the techs, the semis led with the SOX +3.2%, while the biotechs were up +3.1%.
The cyclical index, which is the CYC, also beat the 2.2% SPX gain, advancing
+2.5%, led by the papers +3.8%. This broad sector participation obviously means
the Generals were active across the board.
It was a trend up day
after the early down yesterday. The SPX hit an intraday low of 886.72, then
re-crossed the 240 EMA on your five-minute chart and the three-month median
price line of 888, which was also the previous day’s low, and from there, it was
trend up into the 911.37 close. The QQQs consolidated just above the 240 EMA,
then took off into the 27.40 close. The upper line of the three-month regression
channel for both the QQQs and SMHs is around 28, while the high close for the
QQQs back on Nov. 25, 2002, was 28. And the intraday high since the Oct. 8,
2002, 19.76 bottom is 28.79. Because techs have led and the QQQs are at a very
aggressive inflection point, they become the major focus short term, especially
breaking 28.79.
The market timers are
squirming, along with those that did nothing at any of the much lower key
inflection levels for the major indices and SMHs, so volatility should increase
as they might be forced to play catch up. Having said that, because we are at
the upper end of resistance, you certainly must be ready to play any good
intraday short opportunities, especially after yesterday’s upside move.
Have a good trading day.
Five-minute chart of
Tuesday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Tuesday’s NYSE TICKS