Tuesday, November 11, 2003
Issue Contents:
| 08:13 | Paul's Watch List Stock picks for intraday and swing trades. |
| 08:22 | Good Morning Plan for today. |
| 08:29 | [$SOX, SMH, Daily] Semiconductor Sector Technical Update |
| 08:35 | [$SPX, Daily] S&P 500 Index Technical update. |
| 08:49 | [TYZ3, USZ3, Daily] Treasury Bonds and Notes Technical update. |
| 09:10 | Daily Swing Trade Setups for today. |
| 16:16 | Active Trader Transcript Real time forum log. |
This is Paul's intraday and swing trade watch list for Tuesday. He will review the setups for the Level 4 Active Traders at around 11AM Eastern.
BUY SCALPS:
- MEDI @ 25.98
- BRCM @ 36.21
- VRTS @ 38.73
- XLNX @ 34.14
SHORT SCALPS:
- MO @ 48.44
Prices above are used as ALERTS to look for intraday entries. If you need additional ideas, don't forget that we have automated Stock Scan Lists as well.
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Teresa is out of the office today. Market participants usually expect that the market will be "slow" on a semi-holiday like today.
Just a reminder to read the big issue of the newsletter written last Thursday, because this is an important juncture in the market.
[$SOX, SMH, Daily] Semiconductor Sector
When we last looked the the daily charts, the plan was to "watch for sudden death".
$SOX Daily: Well, sudden death is exactly what we got yesterday, with the biggest down day we've seen in a long time, set up on a tiny doji last Friday. The plan going forward is to watch for a place to put on a short sale on the daily chart.
When we last looked at the $SPX, it was in an upswing, pending a small test of top on the daily chart.
$SPX Daily: We can see that the Connors Turtle Soup test of top on a 20-day high failed to move upwards in the $SPX 1060 area. At this point, even if the $SPX moves back down into the 1030 area, we still consider it to be inside a big congestion area.
$SPX Daily: IF we switch over to swing chart, you can see that November 5 swing low is a potential point of suppose, and also happens to be near the 20-day EMA. For scalpers of the Connors Turtle Soup setup, this is their first downside target and they would now like to see it get some action underneath this area to confirm that a significant reversal has taken place.
NOTE: Do not forget that there is a sell signal set up on the weekly chart based on $VIX. The daily charts of the two other major indices -- Dow Industrials, NASDAQ 100 -- looks exactly the same.
[TYZ3, USZ3, Daily] Treasury Bonds and Notes
We may finally see action on the Treasuries later this week, as auctions for longer durations take the spotlight. Tomorrow we will see the 5 Year Note auction, while the 10 Year Note auction happens on Thursday. When we last looked that the TY and US, we updated the triangular congestion areas seen on the daily charts.
In the context of the weekly and monthly charts, the resolution of this congestion area to the downside will tell us one thing: that the bond crash is about to enter its second phase, in the big picture, with the "neckline" marked on the weekly TY and US charts as the first downside target.
DECEMBER TREASURY NOTE FUTURES Daily: Will this be the real breakouts? Probably needs a catalyst, such as a bad 5 or 10 Year Note auction...
DECEMBER TREASURY BOND FUTURES Daily: Same story here.
THOUGHT OF THE DAY: As I have said many times before, Treasuries and stocks do not always trade in opposite directions. For example, if the second leg of the bond crash does begin, obviously investors will be fleeing out of bonds, but the rising rates may cause selling in stocks too because higher interests rates make potential capital gain and dividends less attractive.
Yesterday, we updated a number of stocks on the watchlist and picked SBUX as our trade of the day.
SBUX Daily: Hits the first downside target on schedule, and we'll now see if the blue line will be confirmed as new support. Given the extreme ADX for this symbol and timeframe, we may well have a spike high here, going into their earnings announcement, expected on Thurday.
If you want to hit and run and exit well before the announcement, that's fine. For those who want to stay in for one more day, your stop loss should be moved down to yesterday's high plus a touch. The premise is that IF this is a spike high, THEN it should not be returning to this point for the duration of this trade, and you would be looking for it to crash through the October 30 high today on the way the next downside target of $31.32, which is the low of the tall white candlestick from November 5.
We will have new setups for tomorrow, after I return to the office. Have a good trading day.
Real time forum log.
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