Turkey Thin

November 21, 2001
Kevin Haggerty

The
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gave you two
more short trades at the 30-week EMA zone of 1152 yesterday, which makes a total
of six over the past week. The first failure was at 1151 on the 10:20 a.m. bar
on your five-minute chart, which gave you a narrow-range doji reversal entry.
The index traded down to 1144.22, which was the exact .618 retracement to Monday
afternoon’s intraday low. I hope you sequence traders caught it. If you didn’t
take the reversal-bar entry, you got a second chance on a 1 2 3 higher bottom.
The rally carried to 1152.45, which was exactly the 1.27 extension of the leg
down from 1151 to 1144.22. You got an inside-pattern reversal-bar entry right at
the 1.27 extension and the 30-week EMA. This decline carried down to 1142.17,
with the SPX closing at 1142.66, -0.7% on the day. If
you faded the resistance and took the sequence trades, you had a really good
day.

The Dow ended off -0.8%,
while the NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) closed down -4.8%, with the big losers being the
semis and many of the funny money stocks that have had extended advances. The
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
gave back -5.8%, while the
(
SMH |
Quote |
Chart |
News |
PowerRating)s have backed off -9.8% from the .618
retracement to the May 22 high. The .618 level was 44.32. The SMHs hit 44.70 on
Nov. 14. The SMHs closed at 40.33 vs. its 100-day EMA of 40.60, its 20-day EMA
of 40.35, and the 50-day EMA just below 39. So we have pivot points to work off
of if the semis have a bounce today and/or Friday.

(
QLGC |
Quote |
Chart |
News |
PowerRating) caught the
air pocket yesterday, breaking downside out of a triangle at the 200-day EMA and
dropping 9.1% on the day, trading only 87% of its average volume. Many of the
semis and biotechs traded down in air pockets yesterday on less than their
average volume. I guess the gang took the day off.

We certainly didn’t get
many long side continuation entries yesterday, or else we were stopped out of
the few we got.

Stocks
Today

There are no real daily
chart setups today in the NDX 100 where there was any evidence of buying
pressure yesterday. That means for today you look to the semis and funny money
stocks on the intraday charts for setups. The better scenario will be a red
opening which is not too deep and then Trap Door long entries which you might
ride if we catch a pre-holiday mark up. The government just might want the
markets to have a happy turkey day.

Have a good trading day
and have a wonderful holiday.

Five-minute chart of
Tuesday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Tuesday’s NYSE TICKS

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Turkey Thin

BUY THE FEAR, SELL THE GREED

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