Watch For Time Zone This Week
It was another low-end
volume day with the NYSE volume 1.36 billion. The internals were
positive with the volume ratio 76 and breadth +1150, as the SPX closed at
1178.84, +0.6%, as did the Dow to 10,384, and the Nasdaq to 1980. The QQQQ
closed at 36.03, +0.5%, which is right at the initial resistance level. The
heavy resistance is 36.40 – 37, which includes the longer-term moving averages.
In the sectors, the XBD was +3.2% on the
ETrade-Ameritrade rumor. Big brokerage firms were up on average about half the
XBD gain, so it was skewed–but up nonetheless. Daytraders had another good day
in the energy stocks as the OIH closed at 93.12, +1.7%, after an RST buy entry
above 91.98 with entry on the 10:00 AM bar and trading to 93 by the 10:40 AM bar
and eventually closing at 93.12.The rest of the primary sectors closed in-line
with the major indices but they were all positive.
The SPY closed at 117.82 but is still contained
by its 3-day range high at the 118 level, although it ticked above that by a few
pennies at 4 PM but traded down into the 4:15 PM close. There is a negative
divergence in the Chande Momentum Oscillator (see SPY 5-minute chart). The DIA
is trading in a similar range pattern, unable to trade above 104. It ended the
day at 103.75, +0.3%. The Nasdaq Composite is pushing its long-term moving
averages and upper channel line. That zone is 1991 – 2010 and it closed
yesterday at 1980, so it is show-and-tell time for the QQQQ and Nasdaq. The SPY
and DIA potential reversal zones are 118.40 – 119.54 and 104.86 – 106.
The decline from the SPX 1229.11 high was 31 days
and this current move from the 6-month, -2.0 standard deviation zone is 14 days
long today, so the time confluence with the .50 – .618 retracement zone for the
SPY and DIA is 15-19 days. There is also a longer-term time zone this week from
the 2000 bull market high so it is a potential reversal period more so than
acceleration through the retracement price zone.
The primary price and volume thread yesterday in
the S&P 500 stocks was clearly in the utilities as a large merger was announced,
so most all utilities advanced on better than average volume. Good news most
often comes to “above the line” stocks and the XLU has been in an ABL condition
for quite some time. The brokers and energy stocks had good percentage advances,
but it was on very light volume
Have a good trading day,
Kevin Haggerty
P.S. I will be
referring to some charts here:
www.thechartstore.com in the future.
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