The Game Is On
It
looks like they found the beach ball again. Yesterday,
the indices rebounded, with the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) +1.8%, Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
+1.4%, Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) +2.3%, and NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) +3.4%. NYSE volume
was about average at 1.35 billion, the volume ratio reversed to 76 from the
oversold 8 on Tuesday, and breadth was +1260. At 7:00 a.m. ET this morning, I
see the S&P futures -10, Dow futures -75 and the Nasdaq futures -13. What a
great game it is.
This kind of volatility
gave us excellent opportunity yesterday in the major indices, semis and
biotechs. After the gap up opening, the indices reversed and made intraday lows
in the afternoon which set up some excellent trades. The homerun was the SPX,
which gained over 20 points from the 875 longer-term standard deviation band
given to you in yesterday’s
text.
It was a sequence
trader’s delight as you had a key level with an RST entry in confluence with a
1.27 Fib extension of the leg down into the close on Tuesday. That late Tuesday
low was also the 3 point on the RST. If you have attended a seminar or gotten
the tapes and didn’t get it, then you must get more disciplined anticipating
potential setups as they develop.
Entry was above the high
of the low bar, which was 877.27, as the SPX ran to an 896.10 high, closing
right on the .382 retracement level of 893, which is using the 965 high and the
776 low. This entry also became a 1,2,3 higher bottom, with entry above 878.12
and took off right at one of the program time zones I’ve given to you on TradersWire.
My focus yesterday was on
the semis and biotechs and proved to be rewarding.
(
KLAC |
Quote |
Chart |
News |
PowerRating) made a run from
an inverted head-and-shoulders pattern and the right side of that pattern is,
and is usually always, a 1,2,3 higher bottom which gave you an earlier entry.
The
(
SMH |
Quote |
Chart |
News |
PowerRating)s had come earlier from a 1,2,3 higher bottom running almost a
point.
(
QLGC |
Quote |
Chart |
News |
PowerRating) had an excellent run from a 1,2,3, along with 1,2,3s in
(
NVLS |
Quote |
Chart |
News |
PowerRating) and
(
MXIM |
Quote |
Chart |
News |
PowerRating). The
(
QQQ |
Quote |
Chart |
News |
PowerRating)s and Nasdaq both came out of RSTs.
The
(
BBH |
Quote |
Chart |
News |
PowerRating)s formed a double bottom at the 78 level, then came out of a
symmetrical triangle above 79.25, running to 81.65. There are obviously other
trades in many of the other biotechs.
Hopefully, most of you
caught the afternoon trend from the key level, as there was opportunity across
the board, not just in semis and biotechs, but my focus remains there because of
the volatility. Watch the bouncing ball and you will usually find setups around
these key levels.Â
Have a good trading day.
Five-minute chart of
Wednesday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Wednesday’s NYSE TICKS