This Preparation Lets You Concentrate On Price Levels At Zones
What Tuesday’s Action Tells You
The SPX
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between 984 and 980 with NYSE volume very light all day until the infamous
“they” ran the futures, as the Fed made its “no news” rate announcement. The SPX
was manipulated up to a 990.35 close at +1.0% on the day. The Dow
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closed at 9310, also +1.0%, while the Nasdaq
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QQQ |
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nothing” market all day, especially on such mundane news, but still accompanied
by some empty suit media hype. NYSE volume was once again only 1.1 billion
shares, the volume ratio was 76 and breadth +1145, both positive in spite of the
volume.
In the sectors, the
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BBH |
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closing at 130.45, and there was good trade-through entry above 128.12 on the
9:40 a.m. ET bar, trading to a 128.92 high before a breakout of the 129 – 128.50
Slim Jim from 10:00 a.m. until the Fed announcement. When the BBHs trade that
tight all day, you can bet it is slow. The
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SMH |
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-20% of its average volume, so the buyers yesterday at the 50-day EMA zone are
looking good. All of the major sectors finished green, except for the
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PPH |
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The strongest sector was the brokers, with the XBD +3.1%. Yesterday’s market
action was yet another day of rising prices on declining volume, with the
afternoon futures game forcing the rising prices, not the Generals lined up
aggressively buying stocks on the NYSE floor or OTC market.
For Active Traders
There wasn’t much for active traders in the major
indices prior to the afternoon “game.” If you bought the QQQ inside-bar setup on
a pullback to the 240 EMA at the 10:00 a.m. period, which then also re-crossed
the 50-day EMA, you saw it only trade up to 30.55 before going sideways until
the 2:30 p.m. announcement. The SPX and Dow were the same as the QQQ on that
early trade with no real carry through before Slim Jimming it until 2:30 p.m.
Today’s Action
Starting out this morning, the Dow has advanced
+3.5% from the 8997 low last Wednesday, which was also a re-cross of the 50-day
EMA which was 9036 at the time. It closed yesterday at 9310, just below the bull
market rally high close of 9323 on June 17 and intraday high of 9353. Certainly
that is now a magnet on any intraday rally today if there is a fifth day up in
succession. Each day of this bounce off the 50-day EMA has seen higher lows,
highs and closes accompanied by declining volume, so if that magnet is taken out
today, I would be ready for an intraday short entry below 9353. The five-day RSI
is 73.31 after this price move up on declining volume, so no interest from this
corner buying any breakout to new highs today.
The SPX closed at 990.35, right at its monthly
pivot, which is 989.27. If the “game” goes green today, I want to be aware of
the nearest confluence above 990.35 which might provide an intraday reversal,
and that would be the following:
998.93 |
1.27 Fib extension of the 954 – 789 leg |
| 998 | .382 RT to the 1982 low from 1553 |
995.23 |
.786 RT to the most recent swing point high of 1004.59 |
994.56 |
.618 RT to the recent rally high of 1015.41 from 960.84, the most recent low |
| 994 | .50 RT to the 1994 low from 1553 |
A move into this confluence could be coincident
with a takeout of the Dow 9353 magnet, just 43 points above yesterday’s close,
and then a quick reversal. This is the type of “what if” preparation that allows
you to just concentrate on how price approaches these awareness zones, and then
you can more easily make a trading decision when you see a defined setup.
The QQQs closed at 30.86, with the 20-day EMA in
play both ways at 30.95. The SMH closed at 31.62, with the 20-day EMA also in
play again at 31.54, following the bounce off the 50-day EMA, then at 30.50. If
the indices open quiet, then start to go, a few stocks that set up are
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GILD |
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DOW |
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EMN |
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KLAC |
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ZRAN |
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APOL |
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MWD |
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MRVL |
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TEVA |
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FAST |
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SYMC |
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downside reversal today, the futures/index proxies and HOLDRs will provide more
defined trade selection.
Have a good trading day,
Kevin Haggerty
