Watch These Stocks For An Early Warning
What Monday’s Action Tells
You
More economic news and hype yesterday, gold
hits
new multi-year high above 400, Dollar cash down -.41, but the cyclicals led
the
market to a new rally high and close for the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) at 1070.12.
There was some new December money put to work by the Generals, and it was a
wide-range-bar day (12.3 points), but the price rise was primarily lack of
selling pressure with NYSE volume only 1.35 billion shares. This has been
the
average daily volume for the past few weeks. I would have expected more
volume
than that on a new high breakout by the SPX, so we’ll see who jumps on the
wagon.
The CYC made a new all-time high (since its inception
in June 1997) of 635.14, closing at 634.71, but it had already made a new all-time-high
close on Friday and is now +72% off the October 2002 low. The XLB gapped open
along with the rest of the market and closed at 25.18. The XLBs were led by
the five stocks that comprise almost 50% of the total weighting. They are:
(
DD |
Quote |
Chart |
News |
PowerRating)
which is 15.6% of the weighting,
(
DOW |
Quote |
Chart |
News |
PowerRating) 11.7%,
(
AA |
Quote |
Chart |
News |
PowerRating) 8.7%,
(
IP |
Quote |
Chart |
News |
PowerRating) 7.3%,
and
(
NEM |
Quote |
Chart |
News |
PowerRating) 5.3%. The five stocks averaged a +3.2% gain yesterday, led by
IP +4.2%.
| size=2> |
Tuesday
11/25 |
Wednesday
11/26 |
Thursday
11/27 |
Friday
11/28 |
Monday
12/1 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High |
1058.05
|
1058.45
|
H
|
1060.63
|
1070.47
|
| color=#0000ff>Low |
1049.31
|
1048.28
|
|
1056.77
|
1058.20
|
| color=#0000ff>Close |
1053.89
|
1058.45
|
O
|
1058.20
|
1070.12
|
| color=#0000ff>% |
+0.2
|
+0.4
|
|
-.02
|
+1.1
|
| color=#0000ff>Range |
8.7
|
10.2
|
L
|
3.9
|
12.3
|
| color=#0000ff>% Range |
53
|
100
|
|
37
|
97
|
| color=#0000ff>INDU |
9764
|
9780
|
I
|
9782
|
9899
|
| color=#0000ff>% |
+0.2
|
+0.2
|
+0.2
|
+1.2
|
|
| color=#0000ff>Nasdaq |
1943
|
1953
|
D
|
1960
|
1990
|
| color=#0000ff>% |
-0.2
|
+0.5
|
+0.4
|
+1.5
|
|
| color=#0000ff>QQQ |
35.12
|
35.34
|
A
|
35.34
|
35.90
|
| color=#0000ff>% |
-0.2
|
+0.5
|
+0.2
|
+1.5
|
|
| color=#0000ff>NYSE |
Y
|
||||
| color=#0000ff>T. VOL |
1.33
|
1.10
|
487
|
1.35
|
|
| color=#0000ff>U. VOL |
917
|
798
|
280
|
1.08
|
|
| color=#0000ff>D. VOL |
401
|
295
|
193
|
246
|
|
| color=#0000ff>VR |
70
|
73
|
59
|
81
|
|
| color=#0000ff>4 MA |
61
|
72
|
72
|
71
|
|
| color=#0000ff>5 RSI |
64
|
66
|
69
|
92
|
|
| color=#0000ff>ADV |
2234
|
2144
|
1848
|
2417
|
|
| color=#0000ff>DEC |
1035
|
1061
|
1207
|
882
|
|
| color=#0000ff>A-D |
+1199
|
+1083
|
+641
|
+1535
|
|
| color=#0000ff>4 MA |
+676
|
+1133
|
+1134
|
+1115
|
|
| color=#0000ff>SECTORS | |||||
| color=#0000ff>SMH |
+0.4
|
+0.2
|
+1.1
|
+0.6
|
|
| color=#0000ff>BKX |
+0.3
|
+0.3
|
-0.1
|
+0.9
|
|
| color=#0000ff>XBD |
+1.0
|
+1.0
|
+0.2
|
+1.2
|
|
| color=#0000ff>RTH |
+0.3
|
-0.6
|
+0.3
|
+.06
|
|
| color=#0000ff>CYC |
+1.0
|
+0.6
|
+0.3
|
+1.8
|
|
| color=#0000ff>PPH |
-0.7
|
+.07
|
-0.5
|
+1.6
|
|
| color=#0000ff>OIH |
+1.1
|
+1.0
|
+.02
|
+0.7
|
|
| color=#0000ff>BBH |
-0.9
|
-0.7
|
+0.2
|
+2.1
|
|
| color=#0000ff>TLT |
+0.6
|
-0.4
|
-0.9
|
-0.5
|
|
| color=#0000ff>XAU |
+1.8
|
+2.9
|
+1.8
|
+2.3
|
The volume ratio jumped to 81, the four-day MA
is now 71, with the five-day RSI at 92, and breadth yesterday was +1535, the
best since Monday, Nov. 24. The four-day MA of advances minus declines is now
+1115.
For Active
Traders
Yesterday was the fifth trading day off the
retracement to the rising 50-day EMA where we got the short-term oversold
condition and higher probability trading opportunity, which of course, is
about
3.0% better than what the new-high breakout buyers paid yesterday. The last
three retracements and re-cross of the 50-day EMA were 10/24, 10/1, and 8/8,
all
of which had more volume than the current retracement, so the Generals must
pony
up some more dollars to keep it going, along with the economic
hype.
If the political hacks back away from the
tariff/protectionism tendencies, that would be a short-term positive. The
last
Federal Reserve meeting is 12/9, so if there is a sense of no rate increase,
which appears to be the current consensus, that is an additional year-end
rally
catalyst, or I should say a continuation of this one. Since the August
retracement, there has been only one SPX retracement close-to-close of 3.0%
or
more. It has been a string of higher highs and lows to the 50-day EMA since
August.
In smokestacks yesterday, the biggest volume
and
price increase was IP at +147% more than its average volume, whereas DD was
+3.0% on just 52% more volume, with AA next at +3.4% on just a 33% increase
from
its average volume. Dow was +2.5% on only 7.0% above average volume. Another
key
cyclical barometer I stay close to is
(
PD |
Quote |
Chart |
News |
PowerRating), which has more than double
from
the March low of 30.11, closing yesterday at 65.50, less than a point over
the
.618 retracement to its 10-year high of 89.62 made in June of 1997. The
month of
October was a wide range bar with the most volume of all time, as the stock
went
from a 47.03 to a 62 high, or +31.8%. November has traded between 58.50 and
65.65.
A similar situation I watch closely are the
homebuilders and the interest rate trend, anticipating putting on put
spreads
initially, and if the down move gets traction, outright puts, but never a
short
sale of stock which has no defined risk. Tops, as most of you should know,
are
much tougher to play than fear-induced bottoms. I also watch stocks like
(
CTX |
Quote |
Chart |
News |
PowerRating) when they approach key levels. Right now at all-time highs,
closing
yesterday at 111.50, it is right at the 3.14 Fib extension zone, which is
112.51, of the most significant last leg down from 45.78 in December 1998 to
17.50 in March of 2000, just when the SPX topped out in the parabolic bull
market and gold had rolled under, starting its own bull market. The next
zone
for CTX would be up at 146, which is the 4.25 Fib extension of that same
leg.
These kinds of stocks, and others just like them, are on my close watch list
for
potential shorts that will accelerate much faster than the major indices on
the
next major index downturn, but more importantly will most likely give an
early
warning preceding any major index rollover down.
The Generals were active in MSFT yesterday,
as it
closed at 25.84 on +138% more than its average daily volume and above the
previous 11 closes. The intraday high was 26.21 on the early emotion, while
the
20-day EMA is 25.89. This corner is now involved on the long
side.
Today’s
Action
Early futures are small red, with the
S&Ps -2.3
points, Nasdaq -3 and Dow -25, with the Dollar Index up a bit, and that is
obviously front and center right now.
Have a good trading day,
Kevin Haggerty
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