Trading Symmetry

The (SPX | Quote | Chart | News | PowerRating) and Dow were flat yesterday as NYSE stock exchange volume dropped to its average at 1.171 billion shares. It had a volume ratio of 38 and declines greater than advancers by 570. The NDX 100 (NDX | Quote | Chart | News | PowerRating) ended -1.7% as techs cut a red bias all day. But contra sectors like the (DRG | Quote | Chart | News | PowerRating), (BTK | Quote | Chart | News | PowerRating) and (HCX | Quote | Chart | News | PowerRating) all finished slightly green, in addition to the (XAU | Quote | Chart | News | PowerRating).

The (QQQ | Quote | Chart | News | PowerRating)s continue in what is now a seven-bar range between 30.43 and 27.20. The 10-day EMA is 29.56, and the 20-day EMA is 31.61. Retracement levels to the 39.90 swing point high are .38 -- 32.05, .50 -- 33.55, .618 -- 35.05, and .786 at 37.18. This trading range will more than likely be resolved by Monday. 

The retracement levels for the SPX to the Aug. 27 1186.85 swing point high from the Sept. 21 944.75 low are .38 -- 1037, .50 -- 1066, .618 -- 1094, followed by the .786 at 1135. The EMA in play on the upside is the 20-day EMA at 1053. It's always helpful to be aware of these alert zones so you can observe the intraday action as they approach these zones for possible setups.

There were two good trades in the S&P futures (SPZ1 | Quote | Chart | News | PowerRating) yesterday, with the first one coming on the 10:00 a.m. bar breaking below the 1036 low mentioned in yesterday's text. It traded down to a 1028.80 intraday low on the 10:45 a.m. bar before reversing. The second one was the ever-present 1-2-3 higher low entry on the 11:25 a.m. bar, trading above the 1032.20 high and above the eight-period moving average of the highs. The trend entry was almost the same trading above the 2 point high of 1033. This run took it to a 1043.50 high before a retracement started. If you use the eight-period moving averages of high and low on a five-minute chart, you also got the hook around the low that precedes solid 1-2-3s. I will include the chart in tomorrow's text for your records. 

We start the day with the SPX at 1038.55 after six days up and a 20-day EMA of 1053, so you have to expect some retracement to the 944.75 low, if not a new low. The news seems to indicate that some visible war action will start soon, and the reaction will be instant volatility. Greenspan will cut rates today which seems to fall into the category of "Who cares?" at the moment. Retracement shorts at moving averages and alert zones should be taken because the stop is close and the reward large if we continue south.

Stocks Today

Pattern setups on the daily chart are few and far between, but some of them on the longside are (BAX | Quote | Chart | News | PowerRating), (IMCL | Quote | Chart | News | PowerRating), (GILD | Quote | Chart | News | PowerRating), (STJ | Quote | Chart | News | PowerRating), (HCA | Quote | Chart | News | PowerRating) and (MYL | Quote | Chart | News | PowerRating).

Retracement shorts are (LEH | Quote | Chart | News | PowerRating) and (MWD | Quote | Chart | News | PowerRating). They've both retraced to their 20-day EMA, but an intraday setup is needed if we go red today, as both closed in the top of their range on even smaller volume than previous days. Also, (UNM | Quote | Chart | News | PowerRating) retraced to its 20 and gave us a reversal bar yesterday, and also (IFIN | Quote | Chart | News | PowerRating).

Continuation pattern short entries are (BRKS | Quote | Chart | News | PowerRating), (KO | Quote | Chart | News | PowerRating), (YUM | Quote | Chart | News | PowerRating), (ALL | Quote | Chart | News | PowerRating) and (KMB | Quote | Chart | News | PowerRating) -- use the 200-day EMA as a stop. In this market mode, continue to trade the HLDRs, like the (SMH | Quote | Chart | News | PowerRating)s, (BBH | Quote | Chart | News | PowerRating)s, (PPH | Quote | Chart | News | PowerRating)s, sector SPDRs like (XLK | Quote | Chart | News | PowerRating), (XLF | Quote | Chart | News | PowerRating), (XLE | Quote | Chart | News | PowerRating) and (XLB | Quote | Chart | News | PowerRating), in addition to the market proxies, such as (QQQ | Quote | Chart | News | PowerRating)s, (DIA | Quote | Chart | News | PowerRating)s and (SPY | Quote | Chart | News | PowerRating)s. They have more symmetry and it is easier to identify a move. 

Have a good trading day. Keep your stops close and be flat at the end of the day.

Five-minute chart of Monday's SPX with 8-, 20-, 60- and 260-period EMAs

Five-minute chart of Monday's NYSE TICKS

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