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. For a free trial to Kevin’s Daily Trading Report, please click here.
Commentary for 11/12/12
The significant price support zone following the cycle high at 1474.51 and the change in short-term trend by definition, with two lower highs and two lower lows was 1425-1395. The zone also included the .236 RT to 1266.74 from 1474.51 at 1425.48, and .382 RT at 1395.14 [see Fib calculator chart].
The SPX held the 1395 support level for 4 days and was marked up into the election. However, the SPX declined -3.5% following the Obama win to 1373, but closed above the 1376.41 200DEMA on 11/9 and has held above it so far. The SPX declined on significant volume as soon as the “wrong way” economic President opened his mouth in his first speech about his tax policy objective of taxing the “so called” rich.
There is also Fib symmetry at 1370.63, which is the .50RT to 1266.74 from 1474.51, in addition to a Square of 9 Angle at 1370.80, so the 1377-1370 zone has a good cluster of symmetry in addition to the positive seasonal period into year end, so my expectation is for the market to bounce from this zone.
I have included a section from my Trading Service commentary for today on the tax topic etc. “The idea that raising taxes on the “so called rich” will help pay down the debt is absolutely bogus, and it is the same thing that politicians have done since the panic of 1863, and probably before. Now, once more we hear how the rich do not pay their fair share, when in the reality it is always about Gov’t spending more than they should, blaming the people as always. No matter how much the “Rich” pay in taxes it`s never going to be enough.
Raising taxes lowers economic growth because Gov’t never spends money efficiently. Only the private sector spends money to make money. Taking money away from the private sector and investors always reduces economic growth. Politicians of both parties have known for decades that lower taxes lead to higher Gov’t revenues and lower deficits. It you increase tax rates the Gov’t earns less revenue. However, the Democrats never go that route because of obvious political reasons, especially the current guy in office who has done more debt/spending wise to cripple this country then any previous President in history.
The Democrats like to point to JFK`s economic success , but maybe they better go back an study what he said in Sept 1963 “A tax cut means higher family income and higher business profits and a balanced budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business. And, as national income grows, the federal government will ultimately end up with more revenues” Times have changed, with half the country reliant on the Gov’t dole, and the US is essentially broke, but JFK`s principles remain the same and the current politicians had better get the message.
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