Trader’s Payday
What Wednesday’s Action Tells
You
When the bell sounded yesterday, the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
at 1151.02 was up just 1.9 points, or +0.2%, the same as the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating),
while the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) finished at 2033, -0.3% and the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s
at 36.39 was -0.6%. Both of them remain within their downward channels since
the 01/26 Nasdaq high of 2154 and 01/20 QQQ high of 39. The Nasdaq bounced off
its 89-day EMA of 1992 on 02/24 and rallied to the down trendline at 2064. The
89-day EMA is now 1997, and any more weakness has 1950 written all over it.
NYSE volume dropped to 1.33 billion, the low
of
the past five days, while both the volume ratio, 49, and breadth, -57, were
right at neutral. The supply/demand equation was a push yesterday, in spite
of
the hype news currents, which is evident by the SPX closing percentage range
the
last five days, as it has alternated in the top or bottom part of the daily
range. The numbers have been 73%, 31%, 88%, 21% and 83% yesterday, which if
you
are new to this ragsheet, it means the SPX closed in the top 17% of its
daily
range. That is what you call a “good news/bad news” market. Thank
you, CNBC.
In the primary sectors, the semis resumed that
path of least resistance, with the
(
SMH |
Quote |
Chart |
News |
PowerRating) -1.8% yesterday (see 03/01 commentary),
as the analysts battle it out for and against, which as a trader you love to
see because of the volatility it creates. The CYC declined for the second day
at -0.5%, as the dollar reflex up shakes the multinational tree a bit. The
(
OIH |
Quote |
Chart |
News |
PowerRating)
was -0.7%, which is no surprise after six straight up days. The rest of the
sectors were in line with the SPX and Dow. Net net, over the recent weeks, technology
has been declining, and now the cyclicals, as the XLP, which is the consumer
staples SPDR, and defensive, in addition to healthcare (XLV) and the energy
SPDRs (XLE) have been the leaders. This trend is not good, and there will be
no further party unless tech reverses back up after this current retracement.
| size=2> | Thursday
2/26 |
Friday 2/27 |
Monday
3/1 |
Tuesday
3/2 |
Wednesday
3/3 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High | 1147.23 | 1151.68 | 1157.45 | 1156.54 | 1152.44 |
| color=#0000ff>Low | 1138.62 | 1141.80 | 1144.95 | 1147.31 | 1143.78 |
| color=#0000ff>Close | 1144.91 | 1144.90 | 1155.97 | 1149.10 | 1151.02 |
| color=#0000ff>% | +0.1 | 0 | +1.0 | -0.6 | +0.2 |
| color=#0000ff>Range | 8.6 | 9.9 | 12.5 | 9.2 | 8.7 |
| color=#0000ff>% Range | 73 | 31 | 88 | 21 | 83 |
| color=#0000ff>INDU | 10580 | 10584 | 10678 | 10591 | 10593 |
| color=#0000ff>% | -0.2 | +.04 | +0.9 | -0.8 | +.02 |
| color=#0000ff>Nasdaq | 2033 | 2030 | 2058 | 2040 | 2033 |
| color=#0000ff>% | +0.5 | -0.1 | +1.4 | -0.9 | -0.3 |
| color=#0000ff>QQQ | 36.68 | 36.60 | 37.03 | 36.61 | 36.39 |
| color=#0000ff>% | +0.3 | -0.2 | +1.3 | -1.2 | -0.6 |
| color=#0000ff>NYSE | |||||
| color=#0000ff>T. VOL | 1.37 | 1.50 | 1.45 | 1.48 | 1.33 |
| color=#0000ff>U. VOL | 888 | 888 | 1.17 | 532 | 641 |
| color=#0000ff>D. VOL | 468 | 597 | 259 | 931 | 654 |
| color=#0000ff>VR | 65 | 60 | 82 | 36 | 49 |
| color=#0000ff>4 MA | 52 | 60 | 69 | 61 | 57 |
| color=#0000ff>5 RSI | 52 | 52 | 74 | 56 | 58 |
| color=#0000ff>ADV | 2071 | 2185 | 2508 | 1436 | 1609 |
| color=#0000ff>DEC | 1209 | 1091 | 791 | 1852 | 1666 |
| color=#0000ff>A-D | +862 | +1094 | +1717 | -416 | -57 |
| color=#0000ff>4 MA | +264 | +766 | +1194 | +814 | +584 |
| color=#0000ff>SECTORS | |||||
| color=#0000ff>SMH | +0.5 | -1.8 | +2.3 | -0.2 | -1.8 |
| color=#0000ff>BKX | +0.2 | +0.5 | +0.5 | -0.5 | +0.6 |
| color=#0000ff>XBD | +0.4 | +0.3 | +0.9 | -0.3 | +.02 |
| color=#0000ff>RTH | +0.2 | +0.2 | +1.0 | -1.2 | +0.7 |
| color=#0000ff>CYC | +0.5 | +0.6 | +1.6 | -0.9 | -.05 |
| color=#0000ff>PPH | -.06 | -0.4 | +0.3 | -0.9 | +0.2 |
| color=#0000ff>OIH | +1.0 | +.03 | +2.8 | +0.3 | -0.7 |
| color=#0000ff>BBH | +2.5 | +1.2 | +0.2 | -0.2 | +0.9 |
| color=#0000ff>TLT | -0.4 | +0.9 | -.05 | -0.6 | -0.2 |
| color=#0000ff>XAU | +0.7 | +0.7 | +1.1 | -3.2 | -.09 |
^next^
For Active
Traders
The
(
SPY |
Quote |
Chart |
News |
PowerRating) and
(
DIA |
Quote |
Chart |
News |
PowerRating) both rallied from RST
entries after taking out Tuesday’s low first, then the second-entry RST after
taking out last Friday’s low. The first entry was above 115.29 on the SPY, which
was also a Trap
Door entry. This only advanced to 115.47 before resuming the direction of
the open and making a lower low to 114.92 vs. the previous low of 115.14. The
10:35 a.m. ET hammer bar was also the signal bar with RST entry above 115.04
which took all day to work its up to 115.87 on the 2:35 p.m. bar, closing at
115.69. This second-entry RST was also good because it was in conjunction with
the SPX re-crossing its 1144.71 20-day EMA to the upside.
The initial Trap Door/RST entry was scratched,
or else you lost a few pennies. If you just have the 1,2,3 module, the 11:50
a.m. bar was the 3 point, with entry above 115.15 on the 11:55 a.m. bar. The
TRIN had declined from about 1.40 to about 1.12, but it’s not a good time of
day to initiate a trade. It’s really a dead man’s zone. The DIA gave you the
exact same setups, or else you just played the RSTs
and Trap Doors with the futures.
Today’s
Action
The E-mini futures had a closing price range
between 1152.50 – 1149.50 from 12:30 p.m. into the close, with the 240 EMA
just
below at 1149.37, and the futures haven’t broken out yet as of 8:15 a.m., so
that is the initial focus zone today. The Dow closed at 10,593, with the
20-day
EMA just above at 10,600, so that line will come into play both ways today.
The
QQQ on any early weakness, like yesterday to 36.21, will deserve a look,
especially to the 36 – 36.15 level.
Friday will probably be a trader’s payday because
of the jobs hoopla on this first Friday of the month, and that would be fading
any substantial overreaction. It is also a full moon on 03/06.
Have a good trading day,
Kevin Haggerty
P.S. You can finally learn
what traders have been asking me to teach them for years—