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.
The SPX was +1.0% yesterday to 1105.24 from the previous 1094.64 close, but for day traders there were just two opportunities to cash in on some travel range. The first was the 10:00AM contra move from the 1103.09 high on the 9:55AM bar that traded down to 1095.50 on the 10:20AM bar, and the second was the Bernanke bounce that accelerated on the 10:30AM bar as he told Congress that interest rates would remain low for an extended period of time etc etc etc, all of which he has said many times before. However, after the increase in the rate to banks last week there was more incentive for traders to game his testimony remarks yesterday.
The SPX traded up to 1105.82 on the 11:05AM bar after Bernanke’s remarks, and with the +1.0 Volatility Band at 1105.49 the decision was whether or not to take the short entry below 1104.75. However, the SPX went sideways after the 1105.82 high with minimal downside and closed at 1105.24, so no money was made on the short.
NYSE volume was 1.0 bill shares yesterday, with the Volume Ratio 76 and Breadth Ratio 73. The 4DEMA’s of the VR and BR are now neutral at 49 and 53, which is expected because the SPX has bounced +6.5% off the 1044.50 low at the key price and time zone, which also includes all of the long term EMA’s, and it was the first pullback to these EMA’s since the bull cycle high, so it was obviously an anticipated trading opportunity as outlined in the Trading Service.
The SPX became ST-O/B when it hit the .618RT to 1150.45 from 1044.50 at 1110, which also includes the 1110.14 180 degree angle measured from 1044.50. This short term swing trade short was taken at the SPX 1110.50 level, as I explained in the previous commentary, and right now it’s looking quite timely as the SPX futures are -11 points as I complete this commentary at 8:40AM.
The next commentary is Tues 3/2/10.
Have a good trading day!
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