Trader’s Windfall–If You Were Prepared
What Tuesday’s Action Tells
You
The market action was excellent as the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at 1111.10, +1.5%, reversing in a key time and price
zone
after the 1090.19 low on Monday. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating), 9889, was +1.4%
having reversed the 08/13 9784 low. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), 1929 and
+0.8%,
along with the
(
QQQ |
Quote |
Chart |
News |
PowerRating), 35.82, +0.5%, lagged, although a slug of QQQs were
bought when price traded below 35.50 to a 35.41 intraday low.
NYSE volume expanded to 1.69 billion shares
with
a very strong up volume of 1.35 billion shares for a volume ratio of 81,
which
is very positive, on a reversal from a price zone. Breadth was also very
strong
at +1370. The techs have been outperforming the SPX and Dow, but the
October-fiscal-year-end big money managers clearly jumped into the blue
chips
yesterday, and as I said, “If they can, they will.”
Either way, the reversal yesterday was a
trader’s
windfall, and those of you with
my trading strategies had a great
day.
The primary sectors were up across the board,
except the
(
SMH |
Quote |
Chart |
News |
PowerRating) at -0.3%.
For Active
Traders
For the SPX, it was simply a re-cross of the
1095.86 233-day EMA, then a breakout of the Slim Jim and re-cross of the
1100.93
200-day EMA which carried up to the 1111.10 close.
There were RST daily chart entries for both
the
SPX and Dow. If you traded the
(
DIA |
Quote |
Chart |
News |
PowerRating) RST, you entered the trade above
97.97
which ran to 99.08. The YMZ4 entry was above 9774. The Dow was the most
overextended of the major indices, and Monday’s intraday low was right on
the
six-month -2.0 standard deviation level. There was also other sequence that
most
of you veterans of my seminars had anticipated in your trading plan. If you
are
a short-term trader, you carried the position overnight because you had a
significant profit cushion because of your entry at the lowest common
denominator.
The QQQ gave you a 1,2,3 Lower Bottom on the
35.41 low, which was also an
RST
(see your five-minute chart). Buyers came
in
with size on that initial reversal off the 35.41 low. The QQQ closed at
35.82.
Today’s
Action
Yesterday’s intraday reversal, from and above
the
longer-term moving averages, took the SPX to an 1111.10 high and close and
back
to the lines, which are the 20-, 50- and 89-day EMAs at 1111.08, 1111.38 and
1111.89. Should there be continuation, then the next minor resistance would
be
the 200-day EMA at 1119.38.
If the SPX goes red early, then minor support
would come in at the 1100 – 1103 zone.
The Flip Top lesson posted on TradingMarkets
was
incorrectly labeled . It is not a Flip Top. It will be taken down.
Have a good trading day,
Kevin Haggerty
