The Generals' perception of this market

Kevin Haggerty is a full-time professional trader who was head of trading for Fidelity Capital Markets for seven years. Would you like Kevin to alert you of opportunities in stocks, the SPYs, QQQQs (and more) for the next day's trading? Click here for a free one-week trial to Kevin Haggerty's Professional Trading Service or call 888-484-8220 ext. 1.

The SPX closed at 1274.08, +0.3%, with the .50 RT to 1326.70 from the 1219.29 low at 1273 and the .618 RT at 1286. The Dow went out at 11,225, +0.7%, primarily because of the +6.04% gain by Altria (MO | Quote | Chart | News | PowerRating). The RT levels in play to the 11,670 bull cycle high from 10,699 are 11,185 and 11,300. The market action yesterday was on the light side, with NYSE volume of 1.4 billion shares and the daily range for the SPX only 7.7 points between 1278.32  - 1270.58. Volume ratio was 59 and breadth +811. The XAU led the upside at +1.1% and has finished plus for five consecutive days. The pullback to the 575 - 550 support zone for $GOLD (continuous contract, EOD) brought in buyers. The $US is being sold and gold bought by the Saudis, Russians and Chinese as they continue to adjust their reserves because of the $US weakness against other currencies. The $US will accelerate to the downside on any Fed pause and the continuation of other countries to raise their rates, as they are currently doing. Crude oil made new highs and the energy sector continues to be a leader. Technology is sick, and as one can observe by checking the daily charts for the QQQQ, SMH and $COMPX, the Generals continue to buy defensive issues like healthcare, medical and food stocks, to name a few. All you have to do is check the charts of the sector SPDRs and you will see that the XLP (consumer staples SPDR) is the strongest one, making a new bull cycle high yesterday and also the highest high since 5/02. No one should have to paint you a picture about what the Generals' current perception of this market is, as the bear market defensive stocks lead, along with the commodity sector stocks.

Rallies in the major indices will bring out more selling. Those of you holding Select energy and gold funds--in addition to cash--are in good position relative to the current risk of this market.

Have a good trading day,

Kevin Haggerty