The Expectation After the Q3 Mark Up
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 had declined -3.6% to the 1041.15 low last Friday, which was the initial minor support zone and trend line drawn from the 869 low on 7/8. In the previous commentary on 9/25, I said that I expected the correction from 1080.17 to continue after a mark up bounce for Q3, which ends today.
On Monday the Generals took the SPX up +1.8% on the lowest NYSE volume (979 mm shs) since 8/13, so they didn’t have to do much to push price higher. This was followed by a -0.3% yesterday on only 1.18 bill shs, and very neutral internals, with the volume ratio (adv vol/adv vol + dec vol) at 51 and breadth just -110.
The last day of the QTR usually has a lot of offsetting price action, as you would expect, but regardless of what happens today, the Generals will have an outstanding Q3, which is +15.4% as of the 1060.61 close yesterday. The month of Sept is a historically weak month, but it is +3.9% coming into today.
There might be some new money put to work the first few days of the new month, but I look for the short-term trend to work lower after that. There is support at the 1014 zone, followed by the key price zone from 995-970, which includes the 12 month and 200DEMA’s. I also expect the SPX to resume the intermediate uptrend after the pullback, and then take out (at least) the anticipated 1121 .50RT to 1576 from 667.
I have included the 60-minute chart for the 869-1080 leg which outlines the Fib symmetry, and the key support zones marked in yellow, where the CD leg is anticipated to end.
Have a good trading day!
Click here to find full details on Kevin’s courses including Trading with the Generals with over 20 hours of professional market strategies. Plus a free trial to Kevin’s daily trading service.