Trading strategies in play yesterday

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 remained essentially flat on the week, despite all of the Dow 12,000 hype, economic and earnings reports. SPX closed at 1366.89 (+.07), and that is what it is on the week. This is also indicated by the 4 MA's of the volume ratio at 49 and breadth +415 . The advance continues on fewer stocks, pushing the index, which is also evident when you look at a moving average of NYSE new highs vs the SPX price advance. The semis have headed south the past 3 days, with the SMH -5.3%. Yesterday, AMD (earnings) imploded and closed at -13.3% (AMD | Quote | Chart | News | PowerRating). Traders who are familiar with my strategies had an excellent trading day yesterday in the energy stocks. There were 1-2-3 higher bottoms in the OIH and XLE with excellent symmetry. This of course was the same for many of the component stocks, in addition to a few RST setups, like (VLO | Quote | Chart | News | PowerRating).

NYSE volume was 1.63 billion shares, with the volume ratio 54 and breadth +415. $INDU closed at 12,012 (+0.2), which made the media happy, as they continue to hype it and spin any negative news. The SPX daily range yesterday was only 6 points, which took traders out of the game, as most of the action was sideways with no real travel range. The commodity sector led, as the $HUI (gold stocks) was +3.7%, OIH +3.5% and XLE +2.1%. The energy rally yesterday coincided with the 1-2-3 double bottom pattern reversal for crude oil (CL06) at 11:15 AM, which closed +1.5%.

The pre-market futures are small to the downside, and OPEC cut production (expected), so the energy stocks should have some volatility again today. There are only a few weeks until the mid-term elections; any technical declines from the obvious overbought condition will be small.

Have a good trading day,
Kevin Haggerty

Check out Kevin's strategies and more in the 1st Hour Reversals Module, Sequence Trading Module, Trading With The Generals 2004 and the 1-2-3 Trading Module.