This Is The Way To Develop A Good Feel For The Market
The Generals did a nice job into the October
month’s end. It was an “if they could, they would,” and the net net is they did
with a new high rally close of 1050.71 for the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) on Friday.
The first table that will start your records of objective market interpretation
is now complete, and I will explain the “Net” column today, and then it will be
posted in the legend for future reference.
Monday 10/27 |
Tuesday 10/28 |
Wednesday 10/29 |
Thursday 10/30 |
Friday 10/31 |
Net |
|
Index |
||||||
SPX |
||||||
| High | 1037.75 |
1046.79 |
1049.83 |
1052.82 | 1053.09 | 1053.09 |
| Low | 1028.90 |
1031.13 |
1043.35 |
1043.82 | 1046.94 | 1046.94 |
Close |
1031.13 |
1046.79 |
1048.11 |
1046.94 | 1050.71 | 1050.71 |
| % | +0.2 | +1.5 | +0.1 | -0.1 | +0.4 | +2.1 |
Range |
8.9 | 15.7 | 6.5 | 9 | 6.1 | 9.2 |
| % Range |
25 | 100 | 73 | 35 | 62 | 90 |
INDU |
9608 | 9748 | 9775 | 9787 | 9801 | |
| % | +0.3 | +1.5 | +0.3 | +0.1 | +0.2 | +2.4 |
NASDAQ |
1883 | 1932 | 1937 | 1933 | 1932 | |
| % | +0.9 | +2.6 | +0.2 | -0.2 | -.02 | +3.5 |
QQQ |
34.25 | 35.38 | 35.32 | 35.39 | 35.15 | |
| % | +0.2 | +3.4 | -0.1 | +0.1 | -0.7 | +2.9 |
NYSE |
||||||
| T. VOL |
1.35 | 1.62 | 1.52 | 1.62 | 1.40 | 1.50 |
| U. VOL |
861 | 1.23 | 988 | 799 | 763 | 925 |
| D. VOL |
484 | 390 | 513 | 803 | 654 | 569 |
| VR | 64 | 76 | 66 | 50 | 54 | |
| 4 MA | 43 | 56 | 60 | 64 | 62 | |
| 5 RSI |
39 | 67 | 67 | 64 | 69 | |
| ADV | 2168 | 2229 | 2065 | 1647 | 1792 | 1980 |
| DEC | 1050 | 1034 | 1179 | 1634 | 1418 | 1263 |
| A-D | +1118 | +1195 | +886 | +13 | +374 | +3586 |
| 4 MA | -186 | +422 | +678 | +803 | +617 | |
SECTORS |
||||||
| SMH | +1.0 | +5.5 | +0.9 | +0.9 | -0.5 | +7.8 |
| BKX | -0.4 | +1.0 | +0.5 | +0.3 | +0.2 | +1.6 |
| XBD | +1.5 | +2.6 | +0.5 | -0.2 | +0.5 | +5.0 |
| RTH | +1.0 | +2.3 | +0.2 | -0.4 | +0.1 | +3.3 |
| CYC | +0.7 | +2.0 | +1.0 | +1.2 | 0 | +4.9 |
| PPH | 0 | +1.0 | -0.7 | -1.0 | +1 | +0.2 |
| OIH | -0.4 | +0.6 | -1.4 | +0.5 | +2.4 | +1.6 |
| BBH | -0.9 | +2.0 | -1.3 | -0.2 | +0.9 | +0.5 |
| TLT | -0.2 | +0.5 | -0.9 | -0.4 | +0.9 | -0.1 |
| XAU | +0.5 | -0.7 | +1.8 | -1.8 | +0.5 | +0.3 |
Starting from the top, there are the weekly
“High,” “Low” and “Close” prices for the SPX, including the “Net Percentage” (%)
up on the week of +2.1%. The “Average Range” (Range) for the week was 9.2
points, and the SPX finished in the top 10% of its weekly range (1053.09 –
1028.90) as indicated by a 90 in the “Net Percentage Range” (% Range) column.
For the INDU
(
$INDU |
Quote |
Chart |
News |
PowerRating), Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) and
(
QQQ |
Quote |
Chart |
News |
PowerRating), Friday’s
closing prices are also the week’s closing prices, and the “Net Percentage” (%)
for the week is shown, led by the Nasdaq +3.5% and QQQ +2.9%.
Next, you have the NYSE statistics, which shows
the “Average Total Volume” (T. VOL.) last week of 1.5 billion, “Average Up
Volume” (U. VOL.) of 925 million, and “Average Down Volume” (D. VOL.) of 569
million, which is a 1.6:1 ratio and positive. Breadth is 1980 average advances
on the week and 1263 average declines. The total of the net advances minus
declines is +3586.
As we proceed, I will give you some idea of how
the numbers looked at various significant tops and bottoms. The numbers must be
related to the particular stage that the market is in. The oversold numbers in
July and October ’02 are certainly different than what is oversold in this
ongoing up trend. It’s not always just picking some absolute number as so many
of these services seem to think.
The “Sectors” section is simply the net
percentage gain for the week of the various major sectors. The leaders last week
are consistent with the recovery theme, led by the
(
SMH |
Quote |
Chart |
News |
PowerRating) +7.8%, XBD +5.0%,
CYC +4.9% and RTH +3.3%. After you keep track of the market and sectors this
way, you will develop a good feel for when the rate of change reaches a point
that is unsustainable, and that will usually coincide with extended standard
deviation levels. The relationships of the numbers are, and will be, your best
market commentary if you do it every day.
Friday’s market action was chop, with the SPX in
just a 6.1 point range, and the lack of travel range was expected. With the new
month’s trading starting today, Friday means even less. The trend channel from
the March low on both the weekly and daily charts remains intact, and in fact,
the SPX has yet to have a 6.0% decline close-to-close during this rally off the
March lows.
Another primary tool I use for trend
identification is a 2.0 standard deviation regression channel from the March
rally low to the current rally high, and that is clearly up. I also utilize a
6-displaced-4 EMA of the high and low on both the weekly and daily charts.
Friday’s 1050.71 close remains above its 6-4 weekly EMA of the high, which is
now 1030, with the low at 995.71. On the daily chart, it is 1040 for the high
EMA with 1041 the midpoint of last week’s trading range, and then you have 1029
for the low EMA. I use AdvancedGET for these and many other tools that are
necessary if you run your trading business with a structure that includes
finding high-probability trades with a positive mathematical expectation.
The early futures are green as I do this at 7:30
a.m. ET, with the S&P +4, Dow +53 and Nasdaq +10. As traders, we can just wait
to see if the Generals are going to put some “new month” money to work today,
which means after the up opening, we’ll find out what they intend to do on the
gap pullbacks and first retracement after any early up move.
Have a good trading day,
Kevin Haggerty
