Turk??
The
major indices traded down from
the opening bell yesterday, then we got the mysterious afternoon reversal. The
program gang works for you and against you. The Dow
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$INDU |
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the SPX
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$SPX.X |
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$NDX.X |
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nothing into that action and just care how this oversold condition gets
resolved, and I hope it retraces back up to some resistance level which will
provide a good risk/reward opportunity on the short side.
NYSE volume was 1.4
billion, with a volume ratio of 72, and breadth +716. The Nasdaq, however,
traded a larger percentage above its average volume at 2.2 billion, but had a
dismal volume ratio of 30. Something reads funny on the scorecard between the
SPX, Dow and Nasdaq.
The last three days of
the month and first few days of the new month are always involved with portfolio
adjustments, and this is primarily done through programs. The last reporting
time frame had 35% of the volume in programs, and that is high. Seeing that the
program traders are allowed to front-run their own, or customer, orders under
the pretense of arbitrage, they are the only ones that know when they will
attack or start the game. You are just a pawn in their game, so don’t try to
attach fundamental significance to large futures-induced intraday swings that
the media will attribute to some new economic report. Get real, folks.
Frame your levels and
hope the futures gang blows the underlying in your direction so you can maybe
get a good entry near an inflection point and your stop. That is the best form
of risk management in this, or any, market. I’ll explain some of the program
tactics at the seminar, and you will better understand why so many inflection
points are such magnets and will get taken out before a reversal.
The more important game
to us on an intraday basis is when a sector or group is in play by the Generals
and gets accelerated by opportunistic hedge funds. This action brings in the
daytraders, which means married puts enter the equation. This all means
volatility and great travel range.
We had another
trade-through homerun yesterday in
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ATK |
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LLL |
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(
NOC |
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lesser extent,
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GD |
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on, as all the pigs are at the trough together. Be careful with these
higher-priced stocks, and don’t believe your own headlines. There will be many
air pockets when so many are playing in the same sandbox.
Stocks
Today
The defense stock unit I
gave you yesterday is certainly an intraday focus. If stocks like
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ATK |
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(
LLL |
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for flash intraday short trades, and then maybe a pullback buy setup relative to
the range of the past two wide-range-bar days.
Other stocks that set up:
If they come for the semis,
(
TXN |
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Also,
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KLAC |
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NVLS |
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LTXX |
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MCHP |
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Other stocks:
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LMT |
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they might try to take Lockheed today at the top of a consolidation like they
did with the other stocks yesterday. Also,
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EMN |
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ITW |
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KRB |
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ADBE |
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FRX |
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SYMC |
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ATVI |
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CTAS |
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BBBY |
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PNRA |
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SIAL |
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FITB |
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(
WFC |
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Have a good trading day.
Five-minute chart of
Wednesday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Wednesday’s NYSE TICKS