Large Players, Small Entrance

It was a tech explosion with all of the stocks purged by the institutions at quarter's end leading the charge. Shorts were scrambling as institutions were repurchasing stocks they had sold so as not to be seen with the bad guys at quarter's end. It also appeared to be more than that as several of the largest institutions probably utilized the current extremely oversold condition as an asset. Yes, institutions make premeditated attacks on short-squeeze candidates, and the techs certainly fall into that category, with at least 55 NDX 100 ($NDX.X | Quote | Chart | News | PowerRating) stocks recently trading as teenagers.

The NDX 100 advanced 7.8%; the Nasdaq 5.9%. The Dow and S&P 500 ($SPX.X | Quote | Chart | News | PowerRating) ran 1.9% and 2.0%, respectively, which is good, but not the same as the Sept. 24 explosion which came at the nine-month cycle date along with a Fib pivot date on 9/21. As we have mentioned in previous texts, four cycles come together during the 9/28 to 10/5 period, in addition to the quarter's end and reinvestment of new money starting the fourth quarter. Regardless of the war zone, and on top of some stimulus rhetoric by the government yesterday, I guess the institutions thought the time was right.

NYSE volume surged to 1.67 billion, the volume ratio was 78, and the breadth was +1137. The volume was 40% above the average. The Nasdaq had a similar percentage above its average volume. The tech explosion was led by the ($SOX.X | Quote | Chart | News | PowerRating) on a sector basis at +9.6%, and you know I like that. There were many individual explosions, like Juniper (JNPR | Quote | Chart | News | PowerRating), +26%, Cisco (CSCO | Quote | Chart | News | PowerRating), +22%, and QLogic (QLGC | Quote | Chart | News | PowerRating), +32%. (NVDA | Quote | Chart | News | PowerRating) led the semis at +20%.

As to be expected, the defensive stocks fell off, such as foods, drugs and gold. The SPX closed at 1072.28, almost back to the Sept. 10 1093 close. The NDX closed at 1365 on 9/10 and went out 1249.41 yesterday. An example of how the semis led the down is the (SMH | Quote | Chart | News | PowerRating)s closed at 39.57 on Sept. 10 and went out at 30.90 yesterday on the biggest one-day volume in two years. So, there is certainly room there if the Generals have really made a decision. The SMHs, as I have mentioned in previous text, must clear 32.45 to get above what is now a nine-bar consolidation; the 20-day EMA is 33.51.

Yesterday, the SPX in a spiraling move paused at the 20-day EMA of 1055 for 10 bars, then broke out of that consolidation to new intraday highs, running to the 1066.50 Fib retracement, where it declined from 1066 to 1059. From there, the final leg up took it to 1075, closing at 1072. The next alert level for the SPX is the 1094 .618 retracement zone and the 50-day EMA at 1110. For the NDX 100, the QQQs have the .38 retracement to the 39.90 high at 32.05, then a .24 retracement to the 51.95 high of May 22 at 33.04, along with the .50 retracement to the 39.90 high at 33.55. Yes, there will be a pullback and unknown war volatility is right around the corner. Don't get carried away with yesterday, and use an options strategy for any long positions other than a daytrade.

Stocks Today

The S&P 500 and NDX 100 screens didn't update today on the site, about which I volunteered my obvious comments. For today, focus first on the (QQQ | Quote | Chart | News | PowerRating)s, (SPY | Quote | Chart | News | PowerRating)s and the (DIA | Quote | Chart | News | PowerRating)s. The NDX below 1241 on your five-minute chart, you could see it retrace to the Fib retracement based on yesterday's lows of 1226, 1213, and/or the .618 at 1200. If there is more than a one-day flash, it shouldn't decline more than that if the Generals are still around.

In addition to the market proxies, the semis would be the key sector based on yesterday and how much upside room there is. Look for intraday longs and or shorts in the (SMH | Quote | Chart | News | PowerRating)s, (NVDA | Quote | Chart | News | PowerRating), (KLAC | Quote | Chart | News | PowerRating), (NVLS | Quote | Chart | News | PowerRating), (BRCM | Quote | Chart | News | PowerRating) and (MCHP | Quote | Chart | News | PowerRating). Also keep (CSCO | Quote | Chart | News | PowerRating) and (EMC | Quote | Chart | News | PowerRating) on your radar after yesterday's volume, along with (JNPR | Quote | Chart | News | PowerRating).

When there is more going on, it is better to concentrate on less and avoid trading spontaneously. 

Have a good trading day. Hope to see you all in Vegas at the seminar.

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

Five-minute chart of Wednesday's NYSE TICKS

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