Volatility Band Day
It was
a 2.0 volatility band day, as
the
(
QQQ |
Quote |
Chart |
News |
PowerRating)s traded down to a 34.32 intraday low vs. the 34.38 2.0 volatility
band. A sharp late reflex up into the bell had the QQQs at 34.65 by the close.
The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) hung around the .38 retracement level of 1088 most of
the day, then dropping to 1083 as we got the 3:00 p.m. dive. NYSE volume was
relatively light at 1.18 billion, volume ratio of just 17, and breadth at -1106
to round out the fear day.
Banks and brokers got
whacked, with the
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) -4.2% and the
(
$BKX.X |
Quote |
Chart |
News |
PowerRating) -3.2%. The
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) slid 4.2%, along with the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) down 3.6%. The NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) finished -3.5%, while the SPX and Dow each lost 1.9%.
It didn’t take long to
get from short-term overbought to oversold, as the QQQs have declined -8.6%
high-to-low from last Thursday’s 37.57 high. If yesterday’s late reflex doesn’t
hold up on the QQQs, you have the .618 retracement to the September low of
33.33 right below the 34.68 close to look for a reversal setup.
Tuesday was a minor cycle
day, and today is also an alert day. The three-day NYSE volume ratio is
overbought at 30.7, along with NYSE TRIN, which closed above 2.0. The NDX has
led the decline from the December rally high and is on top of its .618
retracement level to the September lows. The SPX has only declined to its .38
retracement zone, while the
(
$DJX.X |
Quote |
Chart |
News |
PowerRating) has yet to hit its 94.46 .38
retracement level. There is more room on the downside for a further retest of
the September lows by both the SPX and DJX. Expect an oversold reflex in the
indices probably today, but certainly by Friday.
The NDX had an intraday
low of 1380.46 vs. the 1.27 Fib extension of the last leg up at 1378. If there’s
any early red, then the 1.618 extension is 1342.47, which is right on top of the
.618 retracement to the September low of 1335.77.
Stocks
Today
Needless to say, selling
pressure yesterday left us with few long setups from the daily charts. Only five
stocks in the NDX finished in the top 25% of their range, while only 16 S&P
500 stocks did the same.
On the longside from the
daily charts,
(
GCI |
Quote |
Chart |
News |
PowerRating),
(
ESRX |
Quote |
Chart |
News |
PowerRating),
(
SLB |
Quote |
Chart |
News |
PowerRating),
(
BJS |
Quote |
Chart |
News |
PowerRating),
(
IGT |
Quote |
Chart |
News |
PowerRating),
(
PCAR |
Quote |
Chart |
News |
PowerRating),
(
URBN |
Quote |
Chart |
News |
PowerRating),
(
BRO |
Quote |
Chart |
News |
PowerRating) and
(
NE |
Quote |
Chart |
News |
PowerRating).
On the shortside if they
turn them south,
(
MXIM |
Quote |
Chart |
News |
PowerRating),
(
ISSX |
Quote |
Chart |
News |
PowerRating),
(
ISIL |
Quote |
Chart |
News |
PowerRating), the
(
PPH |
Quote |
Chart |
News |
PowerRating)s,
(
ADBE |
Quote |
Chart |
News |
PowerRating),
(
AMGN |
Quote |
Chart |
News |
PowerRating) and
(
TMPW |
Quote |
Chart |
News |
PowerRating).
When possible, stay with
setups in the index proxies, and also if entering above either the previous
day’s low or previous day’s high, it’s best to use second entries. Don’t take a
full position on the first trade. It’s much too choppy.
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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Additional
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