The Casino Will Generate The Volatility And Overreactions

The SPX
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yesterday with a lower high, 1201.97, and low, 1193.33, while the afternoon

market action was again negative in the last two hours of the day. The SPX price

action entered the .618 retracement zone (1193.60) on about 05/19, and it has

been churning between there and the .786 retracement level (1209.22) ever since.

The intraday highs have been between 1202- 1209 five of the past six days. 1190

is the low end focus of the recent range.

There has been way too much of Greenspan

recently, and the empty suits have his 10:00 a.m. ET testimony today to get

hysterical about, and that follows Jobless Claims, so maybe the “Casino” will

generate the volatility and overreactions, which would be another daytrader

bonus. I have included the ongoing SPX five-minute chart since last Friday’s

trading range between 1198.10 – 1192.75 just to keep all of this noise and

reaction in perspective (see chart).

NYSE volume was 1.33 billion shares yesterday

with the volume ratio neutral at 47 and breadth -401. The Dow
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closed down 6 points to 10,477, while the
(
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+1.0%, bouncing off its three-day -2.6% decline and in front of
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“clairvoyant” outlook, which is soon to be forgotten like all the rest of them,

but can often be a volatility catalyst for traders that specific day.

Daytraders got another bonus yesterday afternoon

as the
(
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60 and 240 EMAs (five-minute chart), trading down to 119.67 before closing at

119.91. The QQQQ trade was below 38.20 down to 37.74, which after a reflex to

37.95, then traded down to an intraday low of 37.56, closing at 37.71.

My bias remains to the short side as long as the

06/03 key price and time date holds, and that is the high close of 1204.29 on

06/02, then a 1208.85 intraday high on Tuesday, but only a close of 1197.26. The

Dow diverged, having made its 10,586 high on 06/01, while initial support

remains at 10,400 with the .618 retracement zone at 10,609 and 106 for the

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PowerRating). The high of this Dow rally is 10,586 and 105.83 for the DIA, so the

price action has been churning at the .618 retracement zone for about 15 days.

Gold is also a primary focus again with some potential 1,2,3 Higher Bottoms

setting up as the Dollar rally looks to be in trouble.
(
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individual gold stock to play should the 1,2,3 Higher Bottom pattern complete.

Have a good trading day,

Kevin Haggerty