Daytraders, be nimble this week
Kevin Haggerty is a full-time professional trader who was
head of trading for Fidelity Capital Markets for seven years. Would you like
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NYSE volume declined to 1.59 billion shares on
Friday, as there was no continuation off the 1235.18 Thursday low. The SPX
closed at 1252.30, -0.4% and -2.8% on the week. The Dow was also -0.4% to 10,892
and -3.1% for the week. The sectors declined in-line with the SPX on Friday,
except the XBD, which was +0.5%. The commodity sectors led the downside last
week with double-digit losses in many of the energy, copper, steel and gold
stocks. The SMH (semis) was -6.3% last week and has declined -16.5% high to low
since the 5/8/06 38.48 high. It is trading about 10% below its 200-day EMA,
based on Friday’s 32.57 close. Even the CNBC empty suits cannot spin that. In
the commodity sector, energy and gold will have another sharp upside reversal.
There is crude oil ($WTIC) support at 69 and for $GOLD at 575 – 550 (continuous
contract-EOD).
This week is triple witch expiration (forget
about stock index futures) and all of the major indices have positive momentum
divergences following Thursday’s mini-meltdown, so there might be some upside
bounce into expiration. However, the trading will be erratic, so daytraders must
be nimble and expect shorter directional moves, as there is lots of random price
movement outside of the normal Generals buying and selling. The SPX, Dow and IWM
all closed just below their 200-233 day EMA zones, so any short-term come back
by the bulls will occur from this zone.Â
Have a good trading day,
Kevin Haggerty
