Trader’s Zone Of Opportunity
What Tuesday’s Action Tells
You
Market commentary is not needed as it was
simply
a Greenspan reversal on his remarks, not the expected event. The herd
stampeded
on the 2:20 p.m. ET bar after a steady positive green day up to that point.
Just
before 2:15 p.m., the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was +5.4 points, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
+42 and the
(
TLT |
Quote |
Chart |
News |
PowerRating) +0.6%. When the crowd left, the SPX was -1.0% to
1171.72,
the Dow -0.9% to 10,470. The
(
QQQQ |
Quote |
Chart |
News |
PowerRating) finished at 36.13, -1.2%, and the
Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), 1989, is now also trading below its 12-month EMA
with
the QQQQ. The TLT reversed to a -0.8% close with the XAU -2.1%. Energy was
the
leader all day with the
(
OIH |
Quote |
Chart |
News |
PowerRating) +2.6% at one point, but finished at +0.8%.
The
BKX, -1.8%, XBD, -1.7%, and the
(
SMH |
Quote |
Chart |
News |
PowerRating), -1.3%, led the sector downside.
NYSE
volume stretched to 2.1 billion shares with the volume ratio 27 and breadth
-1439, reversing from +938 before the 2:15 p.m. Fed news.
The air pocket carried both the
(
SPY |
Quote |
Chart |
News |
PowerRating) and
(
DIA |
Quote |
Chart |
News |
PowerRating) to extended band levels. There has been no close above the high of
the
low day for the past five days, three of which are in the
RST zone,
therefore no
RST entry signal as of yet. On my momentum composite, both the DIA and SPY
are
below the -100 level with 5 RSIs of 11 and 15, so the short-term trend is
very
oversold. The SPY is -5.1% from the 03/07 123.25 high and is -4.5% from the
RST
short entry on the 03/08 key time date below 122.40, which is now closed
out.
That RST short was at the +2.0 three-month band, and now the hourglass has
turned upside down into the 03/18 time date, plus two day, and the -2.0
band, so
it is another trader’s zone of opportunity. Refer to the SPY longer-term
weekly
chart which outlines the current zone. The weekly trend is up, and this
current
decline is a retracement in that trend, and price is in the
lowest-common-denominator zone for a good risk/reward short-term trade
because
the stops below the 40-week EMA are so tight.
Any carryover weakness on Wednesday will set
up
some good long side
Trap Doors.
This is being done Tuesday night for
Wednesday.
Have a good trading day,
Kevin Haggerty
P.S. I will be
referring to some charts here:
www.thechartstore.com in the future.
