Why The First 90 Minutes Of Trading Is A Gold Mine
What Friday’s Action Tells
You
Technology picked up again last week, as the
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) ended the week at 1121.86, +1.1%. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating),
however, ended in the red at -0.8%, as the Generals sold off some of their
cyclical holdings. The CYC was the loser on the week at -1.2%. The semis
were
the big winner as the
(
SMH |
Quote |
Chart |
News |
PowerRating) had a +7.9% week and is +18.3% over the past
15
trading days from the 38.50 – 39 zone which you were prepared in advance as
we
had anticipated a high-probability sequence. The
(
OIH |
Quote |
Chart |
News |
PowerRating) surged again at
+5.4%
at week’s end and was +2.1% and +3.8% on Thursday and Friday. The XBD at
+1.8%
also outperformed the SPX, and the
(
TLT |
Quote |
Chart |
News |
PowerRating)s had a spurt at +3.0% on the
week,
so they go on the short watch list from this level up.
NYSE volume on Friday was 1.67 billion, and that
completed a big volume week that averaged 1.64 billion shares, which indicates
the new money and allocation activity of the Generals. But the 4 MA is neutral
at 53, and with the late-afternoon knife down in the major indices, the 5-day
RSI is now 60, while the 4 MA of advances minus declines is just +284. If the
major indices back off from here, you will see these numbers roll down to where
there is opportunity for retracement buyers, but until then, there is no significant
edge on the long side.
| size=2> |
Monday
1/5 |
Tuesday
1/6 |
Wednesday
1/7 |
Thursday
1/8 |
Friday
1/9 |
Net
|
| color=#0000ff>Index | ||||||
| color=#0000ff>SPX |
|
|||||
| color=#0000ff>High |
1122.22
|
1124.48
|
1126.33
|
1131.92
|
1131.92
|
1131.92
|
| color=#0000ff>Low |
1108.48
|
1118.44
|
1116.45
|
1124.91
|
1120.90
|
1108.48
|
| color=#0000ff>Close |
1122.22
|
1123.67
|
1126.33
|
1131.92
|
1121.86
|
1121.86
|
| color=#0000ff>% |
+1.2
|
+0.1
|
+0.2
|
+0.5
|
-0.9
|
+1.1
|
| color=#0000ff>Range |
13.7
|
6.0
|
9.9
|
7.0
|
11
|
23.44
|
| color=#0000ff>% Range |
100
|
87
|
100
|
100
|
10
|
57
|
| color=#0000ff>INDU |
10544
|
10539
|
10529
|
10592
|
10459
|
-0.8
|
| color=#0000ff>% |
+1.3
|
-.05
|
-.09
|
+0.6
|
-1.3
|
|
| color=#0000ff>Nasdaq |
2047
|
2057
|
2078
|
2100
|
2087
|
+3.0
|
| color=#0000ff>% |
+2.0
|
-0.5
|
+1.0
|
+1.1
|
-0.6
|
37.74
|
| color=#0000ff>QQQ |
37.12
|
37.32
|
37.68
|
38
|
37.74
|
+3.9
|
| color=#0000ff>% |
+2.1
|
+0.6
|
+0.9
|
+0.9
|
-0.6
|
|
| color=#0000ff>NYSE |
|
|
|
|
|
|
| color=#0000ff>T. VOL |
1.50
|
1.49
|
1.7
|
1.86
|
1.67
|
1.64
|
| color=#0000ff>U. VOL |
1.13
|
778
|
957
|
1.25
|
615
|
946
|
| color=#0000ff>D. VOL |
364
|
688
|
709
|
603
|
1.04
|
681
|
| color=#0000ff>VR |
76
|
53
|
57
|
67
|
37
|
|
| color=#0000ff>4 MA |
59
|
59
|
60
|
63
|
53
|
|
| color=#0000ff>5 RSI |
84
|
87
|
92
|
91
|
60
|
|
| color=#0000ff>ADV |
2242
|
1724
|
1775
|
2033
|
1639
|
1883
|
| color=#0000ff>DEC |
1073
|
1579
|
1541
|
1254
|
1661
|
1422
|
| color=#0000ff>A-D |
+1169
|
+145
|
+234
|
+779
|
-22
|
+2305
|
| color=#0000ff>4 MA |
+458
|
+355
|
+447
|
+582
|
+284
|
|
| color=#0000ff>SECTORS |
|
|
|
|
|
|
| color=#0000ff>SMH |
+3.6
|
+0.6
|
+1.2
|
+2.7
|
-0.2
|
+7.9
|
| color=#0000ff>BKX |
+0.8
|
+0.2
|
-.07
|
+0.3
|
-0.4
|
+0.2
|
| color=#0000ff>XBD |
+1.2
|
+0.4
|
+1.0
|
+0.1
|
-0.9
|
+1.8
|
| color=#0000ff>RTH |
+0.4
|
+1.5
|
-.09
|
-1.3
|
-0.3
|
-0.6
|
| color=#0000ff>CYC |
+1.7
|
-0.5
|
-.02
|
+1.2
|
-1.0
|
-1.2
|
| color=#0000ff>PPH |
+1.1
|
-0.2
|
+1.0
|
-0.8
|
-0.8
|
+0.3
|
| color=#0000ff>OIH |
+1.2
|
-0.1
|
-1.6
|
+2.1
|
+3.8
|
+5.4
|
| color=#0000ff>BBH |
-0.5
|
+0.1
|
+1.6
|
-1.2
|
-.04
|
-0.4
|
| color=#0000ff>TLT |
-0.2
|
+1.1
|
+0.4
|
-0.1
|
+1.8
|
+3.0
|
| color=#0000ff>XAU |
+3.1
|
-2.0
|
-2.1
|
+0.6
|
+1.4
|
+1.0
|
^next^
For Active Traders
The semis gave you a window after the SMHs had
declined 14.1% from the 44.70 double top to 38.41, and then went north, closing
Friday at 44.75 after making a 45.43 intraday high. Traders had a chance to
get on board in the morning on Friday in the SMHs after the economic report
danced down on the opening. The SMH gave you an opening reversal which was also
a Flip Top with entry above 44.44 on the 9:50 a.m. ET bar. (See the
“First Hour Trading Module.”) This trade carried to 45.43 with no threat
of a stop until a 1,2,3 double top with the 1,2,3 trend short entry below 45.07
in the last 90 minutes when the SMH traded down to 44.50, closing at 44.75.
The SPX was a layup for you futures/SPY
traders
as the opening knife down from the previous 1131.92 close to the 1122.66 low
on
the 9:40 a.m. bar set up the Trap Door from the 1.28 volatility band level,
which was 1122.30, and then a re-cross of the 240 EMA of about 1123.50 at
the
time. The contra move carried the SPX back up to an 1131.36 high and then it
was
trend down from there to a new intraday low of 1120.90, closing at 1121.86.
The
media hype on economic reports puts bread on your table, and these emotional
early moves make the first 90 minutes of trading a gold mine.
For Today
The afternoon trend down accelerated in the
last
90 minutes, kicking off the Jan. 12 – 13 time period. In fact, the Dow lost
about 72 points in the last 90 minutes, more than half of its loss on the
day.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating), which hit a 2113 intraday high, then reversed
the
2092 3.14 extension level, closed at 2086. The basic industry stock weakness
preceded Friday’s late selloff, as the XLB made its current rally high at
27.10
and the XLP (consumer staples sector) made its high on Jan. 2.
There are a few more 8:30 a.m. economic reports
this week, including the PPI which will provide the media some hype and traders
opportunity. The primary contributor to the increased volatility I am set up
for will come from earnings reports and overreactions that follow. The early
futures are small green, with the S&P +2.40, Dow +19 and Nasdaq +2. If they
turn south, I will look for short setups in some of the smokestack stocks and
also the semis because they have advanced so much over the past 15 days. Today
starts the eighth week of this current rally after seven straight up weeks into
year-end and the new money and allocation moves starting
out the new year. You tell me how much of an edge you have here.
Have a good trading day,
Kevin Haggerty
