Las Vegas has better reward/risk
Kevin Haggerty is a full-time professional trader who was
head of trading for Fidelity Capital Markets for seven years. Would you like
Kevin to alert you of opportunities in stocks, the SPYs, QQQQs (and
more) for the next day’s trading?
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The SPX reversed from the price
and time zone 1292.92 high (8/9/06) and
hit an intraday 1261.30 low yesterday. Lebanon accelerated, and then we had the
London terror plot yesterday, but as we have seen before, “bad news is good
news.” It is as if the SPX and $INDU are being held up at every potential
negative crisis. Yesterday the SPX bounced off the 200-day EMA (1261.90) and hit
an intraday 1272.55 high. Daytraders in the SPY/futures took advantage from the
support zone.
NYSE volume was 1.59 billion shares with the volume
ratio 58 and breadth +643. The oversold semis, transportation and retail stocks
led the upside, with the SMH +2.2%, RTH +2.2% and $TRAN +1.2%. There was
definitely some short covering. The XAU was -1.6%Â and XLE -0.8% to lead on
the downside. It is an erratic, choppy market that is making daily knee-jerk
reactions on every piece of news. The highest probability for traders is to fade
the extended overreactions and don’t look for much continuation unless the move
starts from a key price zone (trading
service) with symmetry.
My overall market view and strategy is outlined in
the
previous commentary (8/7/06) and you can refer to it in the
TradingMarkets.com archives in my commentary section. The market’s reward/risk
continues extremely negative for investors, but there are no tears shed here for
those of you who have not adjusted equity allocations, as you have had several
opportunities to do same from key levels. You need to free up some cash to take
advantage of the next buy cycle in late 2006 or the first quarter of 2007.
Have a good trading day,
Kevin Haggerty