Major Indexes at Key Levels
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 3/14/11
The SPX was -1.9% on Thur to 1295.11, and the “risk-off’ trade was the market driver. Before the NYSE deep discount opening hit 1297.46 on the 9:40AM bar, the markets were down in Europe, the USD was +0.5, crude oil -1.6, SPX futures -0.4%, while copper and other metals were also weak. The USD finished +0.8, TLT +1.7, and commodities continued to lead the downside into the close.
We all woke up to the Japanese earthquake/tsunami on Fri morning, but the SPX did not implode on the opening few bars, and formed a 13 bar trading range from 1296.96-1293.53 The B/O above 1296.96 was also above the 50DEMA at 1296.80, so there was reason to take the trade. The SPX traded up to 1308.35, and closed at 1304.38, with a small dip in the MOC session.
The USD was +0.8, crude oil -1.8 to 101.37 [WTIC], SPX +0.8, while the energy and precious metals ETFs led the session, as did the XLB and HUI, so the “risk on” correlation was in play. The OIH was -6.5% in 4 straight down days going into Fri, but it consolidated at the 50DEMA after the first bar reversal. This is a defined strategy setup in the Trading Service. The OIH held the 152.23 50DEMA after the 152.50 low of the 1st CBO pattern, so playing the B/O above 153.54 was an easy decision.
Next week is important technically in that the major indexes are right at their 50DEMA zones, and if they break next week the 123 LT trend is in play, and the next significant support for the SPX is the 1229 .618RT zone to 1576 from 667, which is only a -5.0% decline from the 1294 SPX range low, which is a -8.6% decline from the 1344 high. The .618 zone also includes the 1227 11/5/10 high. The short-term channel support is at 1275-1280.
Have a good trading day!
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