Anticipate the Key Trading Zones
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.
In the previous commentary, I said that there might be some new money put to work in the first few days of October, but even if there was, I expected the short-term trend to work lower. There is initial support at the 1014 .382RT zone (667-1576), but the key price zone for any significant correction is the 995-970 zone which includes the 12 MO and 200DEMA’s. However, I also think the intermediate uptrend will continue after the correction and reach at least, the 1121 .50RT zone to 1576 from 667.
The SPX went trend down yesterday, and closed at 1029.85, or -2.6% on the day. It took out the previous swing point low at 1041.17, which confirmed the change in the short-term trend, as it had made a lower high at 1070, and then a lower low yesterday. It also took out the trend line drawn from the 3/6/09 667 low, and the previous minor support high at 1039.47.
There is a minor support high at 1018, the 50DEMA at 1017.61, and then the key 1014 .382RT, so with the SPX down 6 of the last 7 days (-4.6%) day traders should look for a bounce today from the 1018-1014 zone if the “jobs report†knife down accelerates. As of the close yesterday, the internals are still not ST-O/S, with the 4-day moving averages of the volume ratio and breadth only 46 and -205.
Have a good trading day!
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