Vacation?
It
didn’t take long yesterday, as
the NDX
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$NDX.X |
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PowerRating) gave us an opening reversal below the previous close and
also a new intraday low on the sixth bar. See your five-minute charts. The
intraday high was 1405 on the third bar, then it was trend down to close at
1345.32. The SPX
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$SPX.X |
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PowerRating) gave us the same OR, except on the eighth bar,
with an intraday high of 1128.29, then a trend down to close at 1117.80. After
the previous day’s afternoon rebound to the plus side for the major indices, I
thought we had a shot for a trend day — up, that is, not down.
It certainly has become a
vacation market, meaning the market continues what it’s doing and we all go on
vacation. Maybe we would put some backspreads on before we go and then root for
a big move either way. It wouldn’t matter which way. Just in case, we would also
probably put a butterfly on in the middle to allow for stagnation and at least
make some time premium. If this market doesn’t make you get an
option education, nothing will. You should all e-mail Saliba
to get that option course finished because he has some great education to impart
to all of us. If he bites back at you, just tell him Haggo sent you. I’m bigger,
he’s faster.
NYSE volume did pick up
some to 1.2 billion, which is about average. The volume ratio was 47, and
breadth was positive again for the fourth day in a row at +357. Telling us
something? Just to point out the tech/telecom wreck, the Nasdaq traded 1.6
billion shares, with 1.3 billion down and only 300 million up for a volume ratio
of 18, with the NDX 100’s volume ratio below 10. I guess we must scroll the
intraday charts today for tech reflexes if you are not going to stick with the
index proxies, which I favor in this kind of tape. The
(
QQQ |
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Every market makes
someone happy and currently it is the bull market in small-cap and mid-cap. You
can trade the mid-cap using the
(
MDY |
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PowerRating)s and the small-cap using the
(
IJR |
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PowerRating)s. They are above all of my longer-term trend moving averages and
filters. The DJX between 101.50 – 100.91 is a good risk/reward longside entry if
you get a reversal bar pattern because entry is so close to your stop.
The SPX
is below all of its EMAs, and the NDX is drowning under all three and is very
oversold. Nothing changes. What has the most risk has the greatest potential
reward. Much easier said if you are daytrading and not taking positions home
naked. Have you checked the NDX 100 recently and counted the number of
teen-agers in the indexes? I guess they’re going to have to look to rebalance
again, but I think they’re running out of higher-priced stocks to put in it.
Stocks
Today
There aren’t many setups,
but there are some. Daily chart long setups are
(
PCAR |
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(
DG |
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USAI |
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(
BEN |
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(
SCHL |
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(
TIF |
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FITB |
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BAC |
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WFC |
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GM |
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On the shortside,
(
BBH |
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CHIR |
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EMLX |
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IDPH |
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CEPH |
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QLGC |
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PowerRating) and
(
XLNX |
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PowerRating) if the semis go red again.
Have a good trading day.
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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