This Will Get The Game Going Once Again
Down a
hundred, plus a hundred…it just depends on what day you are talking about.
NYSE volume was 1.33 billion, a volume
ratio of 73, and breadth +1093. The SPX
(
$SPX.X |
Quote |
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News |
PowerRating) and Dow
(
$INDU |
Quote |
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PowerRating)
each gained about 1.0%, while the Nasdaq
(
$COMPQ |
Quote |
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News |
PowerRating) was +1.5%. The
(
QQQ |
Quote |
Chart |
News |
PowerRating)s ended +2.2%, reversing the prior day’s -2.2% loss. The
(
SMH |
Quote |
Chart |
News |
PowerRating)s
gained +2.6% vs. the previous day’s -3.2% loss, and so it goes.
Hedge funds, program
traders and daytraders are all trying to game every piece of news. The SPX
started out the day giving us a gap pullback trade that carried 12 points, up to
the intraday high of 842.19 without anything resembling a stop along the way.
That 840 .618 retracement level and the 841 natural square number continue to be
a magnet that price dances around. Price remained at the 840 level for just a
couple of bars, then formed a descending triangle that broke out to the downside
below 837. This downside ended at the .618 retracement to the intraday low and
reversed to the upside from there to close at 837.28. The reversal was on the
2:55 p.m. ET bar on your five-minute chart, and was a net plus retracement
trade, which means above the previous close and above the same day’s open.
The QQQs had the same gap
pullback to a 24.25 high bar from the previous day and the opening bar low
yesterday of 24.35. The retracement was to a 24.31 intraday low on the 10:00
a.m. bar. The opening bar high was 24.55. 24.30 was also the Slim Jim breakout
level from Tuesday, so you had two things working for you as you decided to
either take a trade or not. The QQQs closed in a seven-bar tight consolidation
on the five-minute chart with the entire range of each of these bars within the
range of the 3:35 p.m. wide-range bar, which had a 24.79 high and a 24.62 low.
Depending how they open, 24.79 becomes an action point.
As I said yesterday, the
major indices remain in a neutral zone between the .786 retracement low at 808
and the current rally high of 853. The QQQs have a retracement channel to the
October 1976 low, which right now extends from 26.25 to 23 and buying oversold
weakness and selling retracement strength has been very successful, as it is
in all bear markets. The QQQs closed at 24.77, which is right in the middle
of this channel, which to me is a no decision zone for any naked positions.
The VIX has been in a
trading range since Jan. 27 between 40.68, which is the average of the three
high spikes, and 33.85. It closed yesterday at 35.18. The high of this VIX range
is 40.89, which is right below the down trendline from the July 24 spike high of
56.74, which is at about 41.
As I do this, I see the
futures are flat to plus a point for the S&Ps, but the media hype on the first
piece of news today will get the game going once again.
Have a good trading day,
and have a wonderful weekend.
Five-minute chart of
Thursday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Thursday’s NYSE TICKS