Timing Reality and the Market
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 5/23/11
In the commentary “Market Time Period Alert” I included the monthly SPX chart which indicated how extended the SPX was coming into the weak May seasonal time period, following the 4/24/11 time symmetry when the SPX accelerated to the 1370.58 high, and the coming mid-June very significant time symmetry. Also 5/17/11 was a significant Pi cycle date in that it was 3141 calendar days [Pi 3.1416] from the 10/10/02 769 bear market bottom, and that is the day that the SPX made a 1318.51 low from the 1370.58 high, and just bounced to 1346.82 on 5/19 before taking out the 1318.51 low this morning on the opening bar to 1314.79, versus today`s -2.0 VB at 1313.14.
The USD was down more that -1.0% in overnight trading, the Euro soverign debt problems are front and center, and now the S&P rating agency has downgraded Italy`s outlook to negative [what a surprise] All of the PIGS are negative, but the always late to the party ratings agency are still relectant to step up to the plate and call it like it is, especially with the US.
The SPX has made 2 lower highs since the 1370.58 bull cycle high, and two lower lows as of today confirming the short term downtrend, and is also trading below the 50DEMA at 1328.47. The SPX has failed to penetrate the short term trend line from the 1370.58 high on either of the two short bounces from that 1318.51 low [5.17], and nothing good happens as of this commentary until the TL is broken and the previous swing point high at 1346.82 is taken out, or if there is a continuing decline now below 1318.51 into mid June which would precede a significant O/S rally in a key long term 8.6 year cycle time period [Armstrong].
The USD had declined to a 72.69 low in early May and then reversed, the commodities imploded in addition to margin requirements being raised by the CFTC in Silver, Energy, Gold, and some other commodities, in addition to the SPX making the 1370.58 cycle high on 5/2/11 The USD has now broken of of a flag pattern to the upside and closed Fri at 75.64 with 200DEMA resistance at 77.71 and the equity bulls had better hope it stops there.
That was a significant decline in momentum, and also to the complacency that the Fed could just keep facilitating [manipulating] this market move regardless of little reality, and bogus economic numbers coming from the BLS and other parts of the US Govt, in addition to most of the biased press.
I said that the commodity implosion and reversal of the USD had to affect the equity market and the SPX would most likely remain in a trading range at best or have a significant 8-10% correction especially if it advancing into the mid-June time period.
If you take a free trial to my Trading Service you should review the 5/23/11 commentary which outlines the Pi and mid-June key time symmetry in addition to how to trade it.
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