Trader’s Bonus Day
What Thursday’s Action Tells
You
NYSE volume was on average at 1.48 billion shares
but it was a 1.5 billion day up with a volume ratio of 85 and breadth of +1447.
The SPX closed at 1109.28 just below the 2003 close and +1.6% on the day. There
was a wide range bar day with a close in the top of the range, reversing the
previous fours highs and five closes. Obviously the Generals were involved.
Technology led, with the Nasdaq, QQQ and SMH all up big, rallying off their
rising 40-week EMAs. The Nasdaq was +3%, QQQ +2.7% and SMH +4%. Five of the
primary sectors advanced +2% or more. The Moonshot comes off the short term
oversold 4-day moving average of the volume ratio at 29 and the 4 MA of breadth
-950.
Yesterday’s market action was a gift for those honest traders who don’t submit
to the emotional stock ghosts (see 3/23 commentary) because you were long coming
into yesterday. With the gap up and trend up day yesterday in the QQQ and SMH
the entry decision was much different as it was all continuation and no retracement.
It is a much better decision coming into today concerned about trailing stops
rather than debating yesterday’s market action and what to do. I covered that
before the fact, not after it. I have included the Nasdaq weekly which is the
same zone the QQQ and SMH bounced from.
size=2>Â | Friday
3/19 | Monday
3/22 | Tuesday
3/23 | Wednesday
3/24 |
Thursday 3/25 |
color=#0000ff>Index | Â | Â | Â | Â | Â |
color=#0000ff>SPX | Â | Â | Â | Â | Â |
color=#0000ff>High | 1122.72 | 1109.78 | 1101.52 | 1098.39 | 1110.38 |
color=#0000ff>Low | 1109.69 | 1089.49 | 1091.57 | 1087.06 | 1091.33 |
color=#0000ff>Close | 1109.74 | 1095.44 | 1093.90 | 1091.32 | 1109.28 |
color=#0000ff>% | -1.1 | -1.3 | -0.1 | -0.2 | +1.6 |
color=#0000ff>Range | 13 | 20.3 | 10 | 11.3 | 19.1 |
color=#0000ff>% Range | 0 | 29 | 23 | 38 | 94 |
color=#0000ff>INDU | 10187 | 10065 | 10064 | 10048 | 10219 |
color=#0000ff>% | -1.1 | -1.2 | -.01 | -0.2 | +1.7 |
color=#0000ff>Nasdaq | 1940 | 1910 | 1902 | 1909 | 1967 |
color=#0000ff>% | -1.1 | -1.6 | -0.4 | +0.4 | +3.0 |
color=#0000ff>QQQ | 34.73 | 34.32 | 34.02 | 34.41 | 35.34 |
color=#0000ff>% | -1.7 | -1.2 | -0.8 | +1.1 | +2.7 |
color=#0000ff>NYSE | Â | Â | Â | Â | Â |
color=#0000ff>T. VOL | 1.44 | 1.45 | 1.44 | 1.50 | 1.48 |
color=#0000ff>U. VOL | 340 | 116 | 737 | 448 | 1.25 |
color=#0000ff>D. VOL | 1.07 | 1.32 | 679 | 1.02 | 215 |
color=#0000ff>VR | 24 | 8 | 52 | 31 | 85 |
color=#0000ff>4 MA | 54 | 39 | 32 | 29 | 44 |
color=#0000ff>5 RSI | 26 | 26 | 25 | 24 | 52 |
color=#0000ff>ADV | 1250 | 750 | 1866 | 1148 | 2358 |
color=#0000ff>DEC | 2002 | 2557 | 1399 | 2098 | 911 |
color=#0000ff>A-D | -752 | -1807 | +467 | -950 | +1447 |
color=#0000ff>4 MA | +307 | -288 | -613 | -760 | -211 |
color=#0000ff>SECTORS | Â | Â | Â | Â | Â |
color=#0000ff>SMH | -3.6 | -0.7 | -0.2 | +2.0 | +4.0 |
color=#0000ff>BKX | -1.4 | -1.2 | -.05 | -0.5 | +1.3 |
color=#0000ff>XBD | -1.4 | -2.4 | -0.1 | -1.3 | +2.5 |
color=#0000ff>RTH | -0.8 | -1.5 | -0.3 | +0.3 | +2.3 |
color=#0000ff>CYC | -0.9 | -2.0 | +0.2 | -0.4 | +2.2 |
color=#0000ff>PPH | -1.7 | -1.0 | +0.6 | -0.8 | +0.7 |
color=#0000ff>OIH | -2.5 | -1.6 | -1.4 | -3.0 | +0.8 |
color=#0000ff>BBH | -0.7 | -2.2 | -1.9 | +1.1 | +2.0 |
color=#0000ff>TLT | -0.2 | +0.6 | +0.2 | -.07 | -0.4 |
color=#0000ff>XAU | +0.3 | -0.7 | +0.7 | -2.4 | +2.6 |
^next^
For Active Traders
The best early chance to get long in the S&P
500 yesterday was on the gap pullback. The SPY closed at 109.45 on Wednesday
and gapped open yesterday to 110.08 and traded to 110.20 on the 9:40 AM Bar.
From there, it was a 50% gap pullback to 109.79 at the 20-period EMA (5-minute
chart) and never looked back as it traded up to 111.30, closing at 111. Right
after the initial trade you got an 8 bar Slim Jim between 110.20 and 110 which
was the next best entry. The DIA gave you the same two initial trades and then
it was continuation into the close. The Qs didn’t pull back but did have
some continuation boxes on the way up as did the SMH. It was a Slim Jim blowout
day in the big cap stocks and impossible not to find them if you were scrolling.
Today’s Action
It’s a new day, new plan for daytraders while
those long into yesterday are now managing their position. Then there are those
who chase price and I have my fingers crossed for them that the Generals return.
The positive divergence on Wednesday in the SMH +2%, QQQ +1.1%, and Nasdaq +0.4%
versus the SPX and Dow both -0.2% indicates the Generals/hedge funds were
involved going into yesterday. The SPX closed at its 2.0 volatility band
yesterday and the SPY at 111.02 with 111.24 just above that is the 89-day EMA
and 111.37 (523 trend) as initial barriers and lines to work with both ways. For
the DIA, the 523 trend is at 102.14 and the 89-day EMA up at 102.81. The SMHs
closed at 39.49 with the 523 line down at 38.73 and the 39 low close neckline
from 12/17 as an early downside warning. The SMH runs into stock at 40.50 which
is also the 50 and 89-day EMA zone. The QQQs closed at 35.34 with resistance
lines at 35.83 and 36. After yesterday’s wide range bar day don’t chase initial
breakouts; look for retracements or second entries.
Have a good trading day,
Kevin Haggerty
Â
Â