From 1990 to 1997, Kevin Haggerty served as Senior Vice President for Equity Trading at Fidelity Capital Markets, Boston, a division of Fidelity Investments. He was responsible for all U.S. institutional Listed,OTC and Option trading in addition to all major Exchange Floor Executions. 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 www.KevinHaggerty.com.
My previous commentary was on 4/2 following the $SPX +3.6% vertical move that squeezed shorts big time, and was probably accelerated by the PPT in front of Treasury Secretary Paulson's announcement about new Government oversight over the financial institutions, and the hype on capital infusion for UBS (UBS | Quote | Chart | News | PowerRating) and Lehman Brothers (LEH | Quote | Chart | News | PowerRating) which raised $4 billion through a very generously priced convertible issue in order for it to sell out.
The $SPX closed at 1370.18 that day, and then closed at 1372.54 (+0.2) yesterday after hitting a 1386.84 intraday high. NYSE volume (1.27 billion shares) has declined the last four days, with the last three days less than 1.3 billion shares. The daily chart has a string of 4 straight narrow range Doji bars following the +3.6% thrust day, and the $SPX is +10.3% in just 14 days off the 1257 low (3/17), so the odds favor a reversal rather than any sustained acceleration. The $SPX declined -20.2% in 5 months from the 10/11/07 1576 bull market high to 1257, and has gained back 50% of that decline in 14 days, while a .50 retracement in points would be the 1416 level. The 233DEMA happens to be 1416, with the 200DEMA at 1413, in addition to H&S neckline at 1406, so this is a key symmetry zone, and the next few days is also a key time period.
The intraday travel range the last 4 days has been very beneficial for day traders, and yesterday is a prime example. The $SPX futures were +10 points in Globex and this forced a premium NYSE opening, and the SPX hit 1386.74 on the 12:45PM bar versus the previous 1370.490 close on Friday. This set up an RST short with entry below 1384.70 that traded down to 1369 before closing at 1372.54. There was symmetry with the 1384 270 degree angle from 1257, the 1386 .236RT between 1576-769, and also the +1.0 Volatility Band at 1385.81, so it was a very high probability trade setup with a low common denominator entry, and the symmetry levels were all anticipated in advance which gives you a significant edge, and allows you to trade without emotion, which is always more profitable.
Energy and commodity stocks continue to be a major source of day trading opportunities because of the excellent volatility, especially the intraday travel range where there is almost always two significant trends, and sometimes three. Trading service members know how to recognize and capture the significant moves like SLB trade yesterday. The stock gapped open on typical growth outlook comments by the company, and the "herd" ran the stock +4.0% to 95 on the 10:00AM bar from the previous 91.37 close. This set up the RST 1st hour reversal strategy with entry below 94.73, which then declined to a 90.50 low, and 90.58 close. The primary reason this was such a high probability trade is because the +2.0 Volatility Band was 95.02, and 94.97 is the 2.0 fib extension of the previous leg down from 92.89-90.81. Both of these strategy trades are in today's trading service commentary, and can be reviewed in detail by new immediate free trial subscribers, and you can also review the section on the use of the Volatility Bands. These are tools and strategies that will give you a significant edge.
Have a good trading day!
