Trap Door Time
Early
gap up in both the Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating) and S&P 500
(
SPX |
Quote |
Chart |
News |
PowerRating). The NDX ran to 1739 from the previous close
of 1667 by the 11:10 a.m. bar and it was downtrend for the rest of the session,
closing at 1695.89. As the NDX hit 1739, the SPX made a lower second high, right
at the 50-day EMA for a negative divergence, and then gave you a 12,3 short
entry below 1219.55 — as per the heads up on the TradersWire Interactive.
From entry, the SPX traded down to an
intraday low of 1205.80. Thank you, futures trade.
Volume on the New York
Stock Exchange was about 20% above average at 1.3 billion, with a volume ratio
of 64 and advancers over decliners by +508. The SPX closed at 1215.02 (+0.6). I
don’t read anything into the early rally the day before expirations. The Nasdaq
traded 1.9 billion, about at its average, with a volume ratio of 61 and breadth
of +620.
If the index sells off
today into early next week, it will provide a good long side opportunity. On the
upside, from a position standpoint, it is in the "show me" mode. The
NDX must come out strong above the down trendline and 50-day EMA which right now
is the 1770-1775 level. You have the luxury of watching until that happens or
else we get a lower opportunity after some news hype or some chairman’s cloudy
crystal ball appears again. High
probability next week will take us to different levels, with a rush.
Yesterday there was good
action in the reflex stocks from yesterday’s text. There usually are very
tradable opportunities after they blow them out. Save your five-minute chart of
(
SEBL |
Quote |
Chart |
News |
PowerRating) which gave you a nice Opening Reversal from the 2.0 Volatility Band
zone, based on the two-day 20% washout from 43.55 to 34.70.
The NDX 100 ended the day
+1.7% even after the afternoon swan dive but it was positive that the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
outperformed at +4.6%. There will be no tech rebound without semis as a leader.
We have some more earnings hype to come but most of it will be passed by next
week.
(September
|
||
Fair Value
|
Buy
|
Sell
|
5.45
|
6.60 |
|
Stocks
Today
In the semis,
(
KLAC |
Quote |
Chart |
News |
PowerRating),
(
NVLS |
Quote |
Chart |
News |
PowerRating),
(
ELNT |
Quote |
Chart |
News |
PowerRating),
(
MCHP |
Quote |
Chart |
News |
PowerRating) and
(
BRCM |
Quote |
Chart |
News |
PowerRating). There should be activity
in those stocks.
Other stocks:
(
HD |
Quote |
Chart |
News |
PowerRating),
(
WFC |
Quote |
Chart |
News |
PowerRating),
(
FITB |
Quote |
Chart |
News |
PowerRating) and and
(
FISV |
Quote |
Chart |
News |
PowerRating).
In the reflex stocks —
where the volatility and volume are — of course you want to be back at
(
SEBL |
Quote |
Chart |
News |
PowerRating)
which gave us the Opening Reversal yesterday for about 2 points and then gave
you a continuation short below the previous day’s low of 34.70 as it traded down
to 32.30. So when they ask you what you think about SEBL, your answer is you
don’t, but you take it whichever way it goes.
Other reflex stocks:
(
VRTS |
Quote |
Chart |
News |
PowerRating),
(
VRSN |
Quote |
Chart |
News |
PowerRating) (which became a reflex stock yesterday at -8.7% on 3.8x its normal
volume) and also
(
MERQ |
Quote |
Chart |
News |
PowerRating).
In the energies, which
stuck their heads up yesterday, (I looked at the Change in Direction screen and
saw quite a few energies on it — you always have to pay attention — they are
all Changes in Direction to the upside and some of them on increased volume),
the ones to focus on if they follow through on the energies today are:
(
SLB |
Quote |
Chart |
News |
PowerRating),
(
CHV |
Quote |
Chart |
News |
PowerRating),
(
BHI |
Quote |
Chart |
News |
PowerRating),
(
APA |
Quote |
Chart |
News |
PowerRating) and
(
BJS |
Quote |
Chart |
News |
PowerRating).
On the short side, setups
on the daily charts are
(
PDLI |
Quote |
Chart |
News |
PowerRating),
(
CB |
Quote |
Chart |
News |
PowerRating),
(
BBOX |
Quote |
Chart |
News |
PowerRating),
(
IBM |
Quote |
Chart |
News |
PowerRating), and also
the BBHs and the HHHs.
(
QLGC |
Quote |
Chart |
News |
PowerRating) is also on that list — it has a little bit
to go but if it breaks its low of yesterday, it’s got some open air down below.
Have a good trading day
and a great weekend — and don’t drive backwards in the Hamptons.
Five-minute chart of
yesterday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
yesterday’s NYSE TICKS
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