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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (40469)	12/15/2003 12:13:05 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69262

TradingMarkets.com Avoid Position Entries In Index Proxies Today Monday December 15, 10:06 am ET By Kevin Haggerty What Friday's Action Tells You I had a nice birthday present when I woke up Dec. 14 and heard the news. This morning that has the emotions running high in the futures, with the S&Ps +12, Nasdaq +25 and Dow +115 at 7:10 a.m. ET. This will eliminate, because of the gap openings, any and all daily chart setups from Friday where trade-through entry was above the Friday highs. You can bet that the Generals and hedge funds are happy campers with this news, which is an added bonus for marking up positions into year-end. Last week the SPX and Dow finished at new closing highs, with the SPX +1.2% and Dow +1.6% on the week, led by the CYC +2.5% for the week, followed by the OIH at +2.6%. Technology, which has gotten very extended with lots of air pockets underneath, lagged last week, with the Nasdaq (NasdaqSC:^IXIC - News) +0.6%, (AMEX:QQQ - News)s +0.7%, while the semiconductors and gold were the only sectors to finish negative with the (AMEX:SMH - News) -0.8% and the XAU -4.1%. As you can see on the table, NYSE volume was average last week at 1.33 billion, but the up volume (729 million) to down volume (583 million) ratio improved from the prior week. Monday 12/8 Tuesday 12/9 Wednesday 12/10 Thursday 12/11 Friday 12/12 Net Index SPX High 1069.59 1071.94 1063.02 1073.63 1074.76 1074.76 Low 1060.93 1059.16 1053.41 1059.05 1067.64 1053.41 Close 1069.20 1060.18 1059.05 1071.21 1074.14 1074.14 % +0.7 -0.9 -0.1 +1.2 +0.3 +1.2 Range 8.7 12.8 9.6 14.6 7.1 20.73 % Range 95 8 59 83 91 97 INDU 9965 9923 9922 10008 10042 % +1.0 -0.4 -.02 +0.9 +0.3 +1.6 Nasdaq 1949 1908 1905 1942 1949 % +0.6 -2.1 -0.2 +2.0 +0.3 +0.6 QQQ 35.26 34.43 34.56 35.27 35.28 35.27 % +0.6 -2.3 +0.4 +2.1 -0.1 +0.7 NYSE T. VOL 1.19 1.42 1.41 1.44 1.18 1.33 U. VOL 738 410 515 1.23 754 729 D. VOL 438 999 880 185 414 583 VR 63 29 37 87 64 4 MA 47 43 40 54 54 5 RSI 64 47 45 85 68 ADV 2157 1285 1277 2479 2142 1868 DEC 1088 1994 2025 795 1134 1407 A-D +1069 -709 -748 +1684 +1008 +2304 4 MA +113 -7 -185 +324 +309 SECTORS SMH -0.2 -4.2 +1.2 +2.5 -0.1 -0.8 BKX +1.3 -1.3 -0.3 +0.8 +0.1 +0.6 XBD +1.1 -1.8 -1.1 +1.7 +1.2 +1.1 RTH +0.1 -1.1 -0.6 +1.3 -0.6 -0.9 CYC +1.3 +0.2 -1.1 +1.5 +0.6 +2.5 PPH +0.9 -0.5 -0.5 +1.4 +0.3 +1.0 OIH +0.1 -0.3 +0.4 -0.3 +2.7 +2.6 BBH -0.1 -0.7 -0.4 +1.5 +0.9 +1.2 TLT -0.7 -0.7 +0.2 +0.7 +0.2 -0.3 XAU -0.3 -2.9 -4.4 +2.9 +0.6 -4.1 For Active Traders I have included the SMH five-minute chart from Friday which shows the small gap opening that traded up to 41.28 on the second bar, then reversed the 41.10 lower trading range boundary and traded below the 50-day EMA of 40.75 to 40.63 and the 60 EMA. If you took the initial short trade, you had a quick pop, but the SMH then re-crossed the 50-day EMA of 40.75 with the TRIN dropping below .85, so it looked as if price would continue in the direction of the up opening. It did, but only to 40.95 before reversing again and trading down to the 240 EMA with a 40.47 low (not shown on chart). It got choppy after that with a reflex up to 40.91 from the 240 EMA, which you might have taken, but after that it was a new intraday low of 40.41 and a last-hour rally into the close of 40.91. It wasn't an easy day to trade the SMHs. The key point is that you got activity at the trading range lower boundary in conjunction with the 50-day EMA, and you were prepared to take setups around those points. Today's Action For today, it's all early emotion, so any First-Hour trade strategies will be Trap Doors in conjunction with volatility bands. If the early futures hold above 11 points, the SPX will start out close to today's 1.5 volatility band, which is 1085.67. The 1.0 volatility band is 1081.83, the 1.28 is 1084, the 2.0 is 1089.51, with the 3.0 band up at 1097.15. As I finish this, the futures at 8:00 a.m. read as follows: The S&Ps are +11.10, Nasdaq +22 and Dow +101, so the volatility bands will come into play early. If you play for a quick contra move, keep tight stops and be ready to take quick profits. The same obviously applies to any 1,2,3s in the 2.0 -3.0 volatility band zone. If you are a relatively new trader and don't have a good handle on intraday dynamics and are uncomfortable with high emotion, then don't get involved because today is obviously not the norm. If you are an experienced trader, then you are excited about some potential emotional setups today. Whatever you do, don't rush out and take position entries in index proxies today based on this news event. How it settles and trades going forward is the read we will react to, not today. Have a good trading day, Kevin Haggerty ADVERTISEMENT Trading Markets New! 3 Trading Strategies From Kevin Haggerty. Click Here! -------------------------------------------------------------------------------- Kevin Haggerty was the head of Equity Trading at Fidelity Capital Markets for seven years. In his position, Mr. Haggerty had complete responsibility for all U.S. institutional and broker/dealer equity trading. He is the creator of a series of training modules geared for professional traders, including "How I Trade Major First Hour Reversals For Rapid Gains," "How To Successfully Trade The Haggerty 1,2,3 Strategy," and "How To Successfully Trade The Haggerty Slim Jim Strategy For Explosive Gains." Mr. Haggerty is a co-founder of Tradingmarkets.com and is the founder of KevinHaggerty.com. biz.yahoo.com