There’s No Long Edge For Me Here
It
wasn’t the easiest of trading days yesterday
and was very
erratic, starting with the Flip Top breakout in the
(
SPY |
Quote |
Chart |
News |
PowerRating)s on the
10:05 a.m. ET bar which failed, and then it reversed through the bottom below
92.62, trading down to the 260 EMA on an intraday low of 92.20. This was the
best pattern of the day as you got an RST buy above 92.40 on the 11:00 a.m. bar.
It eventually traded up to 93.37 by the 2:00 p.m. bar after a breakout from a
symmetrical triangle that had formed from 10:15 a.m. to 2:00 p.m. That proved to
be the intraday high, as it reversed back down to the 260 EMA again with a 92.29
low. You got your second RST buy entry above 92.44 on the 3:45 p.m. bar which
ran to 92.79 during the last 15 minutes, but this is not the best time to take a
trade, with only the 15 minutes remaining.
NYSE volume increased
again to 1.5 billion, a volume ratio of 42, and breadth -718. The techs did
better yesterday, with the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s +1.2% and the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating)
+0.7%. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was -0.7%, and the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) -0.4%. The
(
SMH |
Quote |
Chart |
News |
PowerRating)s closed just in the green, but are stretched out at +18.6% low to high
in five days. Both the SPYs and
(
DIA |
Quote |
Chart |
News |
PowerRating)s finished with narrow-range inside
bars and have also closed above their .618 retracements to the Dec. 2 high. The
QQQs have closed above the .50 retracement of 26.53, while the SMHs haven’t
closed yet above the .38 retracement of 25.44. Once through a zone, it is
usually on to the next one, and we haven’t seen a reversal bar yet. The
intraday downside magnet today is the 260 EMA at 92.40, then yesterday’s 92.20
intraday low, and you know where the continuation highs are from Monday.
There is no long edge for
me here, and I keep tight stops on any long intraday setups, but will continue
to take any defined short setups. You saw the results of getting involved in
narrow-range volatility patterns yesterday.
(
BHI |
Quote |
Chart |
News |
PowerRating),
(
BJS |
Quote |
Chart |
News |
PowerRating) and
(
TARO |
Quote |
Chart |
News |
PowerRating)
broke to the downside, while
(
COH |
Quote |
Chart |
News |
PowerRating) advanced. This is why a straddle that you
adjust according to the breakout in the direction of the trend is such an
effective strategy.
Some more setups of this
type of pattern to put in your trading plan for today are
(
SLM |
Quote |
Chart |
News |
PowerRating),
(
PG |
Quote |
Chart |
News |
PowerRating),
(
UPS |
Quote |
Chart |
News |
PowerRating),
(
BAC |
Quote |
Chart |
News |
PowerRating),
in addition to
(
AVP |
Quote |
Chart |
News |
PowerRating) and
(
KMB |
Quote |
Chart |
News |
PowerRating) mentioned in yesterday’s text. I also have
(
CCL |
Quote |
Chart |
News |
PowerRating) and
(
MYG |
Quote |
Chart |
News |
PowerRating),
both narrow-range three- and four-bar patterns, on my watch list. You just watch
them every day until they give you the opportunity, but you must be aware of
them in advance of the trading day.
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