The Travel Range Train

The Techs didn't follow through from their pullback setups as stocks like (NEWP | Quote | Chart | News | PowerRating), (MERQ | Quote | Chart | News | PowerRating) and (JNPR | Quote | Chart | News | PowerRating) took out Wednesday's highs, then reversed, closing in the bottom of their ranges. For those of you who have read the TradingMarkets Guide to the markets, they went from 1,2,3,4 buy setups to 180 sell setups today. As I mentioned in yesterday's text, second entry is the better part of valor in this kind of tape. Nevertheless, these travel range stocks continue to provide outstanding daytrading opportunities. 

In Tuesday's text I said that if the rally continues, I like tech, energies and brokers of the major sectors. Yesterday the techs tanked but the energies and brokers did finish green with the XBD +2% and the OSX +5.4%. The SPX was +0.5%, the Dow +0.6% led by the Basics, the NDX was -2.8% with the SOX down 3.6%.

On Monday, I will include the daily charts of (LEH | Quote | Chart | News | PowerRating) and (MER | Quote | Chart | News | PowerRating) as I thought they provided the best of the broker setups on the daily charts because they were all above their EMAs. MER also gave you an excellent short from a two and a half hour Slim Jim at its highs. I will also include the five-minute chart with the Slim Jim for your records.

You make money with the tools you can use, not opinions. If you can identify the buying and selling pressure, and utilize the Change in Direction or continuation patterns, you will be on the correct road, provided you realize it's a numbers game not an ego game which interferes with your management of risk. With the way these travel range stocks are trading, you can lose 1/2 on six trades and make 3 points each on two others and still net +3. Don't think of them as losing trades, because they are just probes to catch the multipoint moves.

Stocks Today

Let's take the NDX 100 screen, turn it upside down and start with the stocks that were down the most yesterday. Most all of these stocks finished in the bottom 25% of their ranges so you know where the continuation shorts start: (JNPR | Quote | Chart | News | PowerRating), (JDSU | Quote | Chart | News | PowerRating), (CIEN | Quote | Chart | News | PowerRating), (QCOM | Quote | Chart | News | PowerRating), (VRTS | Quote | Chart | News | PowerRating), (CHKP | Quote | Chart | News | PowerRating), (MERQ | Quote | Chart | News | PowerRating), (BEAS | Quote | Chart | News | PowerRating), (SEBL | Quote | Chart | News | PowerRating), (NEWP | Quote | Chart | News | PowerRating) and (VRSN | Quote | Chart | News | PowerRating).

I must note the volume was very light in many of these stocks like MERQ (62% of its 30-day average daily volume), CHKP 71% and BEAS 65%. Only JDSU, CIEN and QCOM had more than 100% of their average 30-day volume.

In the Semis, (NVLS | Quote | Chart | News | PowerRating), (KLAC | Quote | Chart | News | PowerRating), (MU | Quote | Chart | News | PowerRating), (NVDA | Quote | Chart | News | PowerRating) and also (BRCM | Quote | Chart | News | PowerRating) (which is getting very interesting as it tries to come up out of the top of the base down here). So far these are the same Semis but it is the same story. There are great intraday setups and there is institutional interest so we will ride them until they die on us.

In the Brokers, (LEH | Quote | Chart | News | PowerRating), (MER | Quote | Chart | News | PowerRating) and (GS | Quote | Chart | News | PowerRating) all had good intraday ranges so keep them on your radar. In the Financials, (PVN | Quote | Chart | News | PowerRating), (CLF | Quote | Chart | News | PowerRating) and (FITB | Quote | Chart | News | PowerRating). In the energies look for pullback setups in some of the Bush drillers that had thrusts yesterday such as (CAM | Quote | Chart | News | PowerRating), (DO | Quote | Chart | News | PowerRating) and (NE | Quote | Chart | News | PowerRating). Also (BHI | Quote | Chart | News | PowerRating) and (HAL | Quote | Chart | News | PowerRating) which had big moves. You now have the XLEs bumping up against their highs. In the Basics and Industrials, focus on (MMM | Quote | Chart | News | PowerRating), (TYC | Quote | Chart | News | PowerRating), (DE | Quote | Chart | News | PowerRating), (WY | Quote | Chart | News | PowerRating), (DOW | Quote | Chart | News | PowerRating) and (AL | Quote | Chart | News | PowerRating).

Have a good trading day and have a a better weekend.