What A Yawn!
Yesterday’s action, while encouraging for the bears, left few trading
opportunities intra-day. Luckily the opening produced a couple of decent trades,
beyond that I was trade-less in the afternoon.
I had mentioned yesterday that the 920-26 level would be pretty tough, sure
enough that is where the indices slugged it out all day, with neither the bulls
or bears gaining an upper hand. We will just need to see how it plays out going
into today’s session.
Gold was the standout performer on the plus side yesterday. Both the
GOX and XAU
indices are putting in some encouraging patterns. If the market breaks down,
the gold stocks might offer nice intra-day longs to complement to your intra-day
shorts. The gold stocks traded like this early in the year and showed similar
characteristics today. I traded Gold Fields
(GFI) on 2 occasions to the long side as the indices rolled over and the trades
played out rather well. Naturally a return to the go-go gold days of early 2002
would be very welcome.
Look at these nice breakouts from the regression channels. While this is not
indicative of a leg higher in the gold stocks yet, it certainly adds a little
speculative juice to the mix, making for good trading. Look for a close above
68.97 on the XAU as a bullish sign.Â
I like the set-ups off the 5 and 15-minute charts of the individual gold
stocks to play this sector.Â
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As I has been saying, if the market were to weaken, I suspected that the SOX
would lead the charge down. Yesterday was another example of that. While
trading in the afternoon was pretty dull, the SOX did manage to close at the
lows, and below support at 357 and more importantly 365 (August high). If the
sell-off continues, look for an increase in some panic selling as the party
goers who showed up to the SOX buying frenzy last week start to get a bit
nervous.
With the S&P’s (futures) failing to close below 920, the upward trend channel
from the October lows is still intact. This area will offer some great
intra-day set-up opportunities so be on the lookout.
The trade mentioned yesterday in AutoZone
(AZO) was triggered, and has moved down pretty nicely so far. Again, I caution,
this stocks has been a major bear killer all year, and one decent day of follow
through after breaking support is no reason to break out the Crystal. Keep a
tight stop loss if you went short and keep an eye on those target prices, 74.42
and 70.88.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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* indicates a level that is more significant
Random Observation:
The item that showed up in my mailbox yesterday was rater timely with regards
to the warning issued from AOL. I am sure you have received them before, those
slick CD’s offering you hundreds of hours of AOL Internet service blah, blah.Â
Well, the one I received yesterday was pretty slick, it came in a nice case,
similar to the one you get when renting a DVD from Blockbuster. I am not smart
enough to be one of those overpaid CEO’s (Steve Case), but maybe, just maybe, if
they stopped sending out these expensive drink coasters (that is what I use the
CD’s for, thanks for the new one) they would not warn of revenue shortfalls for
fiscal 2003.
As always, feel free to send me your comments and
questions. See you in TradersWire.