Focus on energy, commodities and semis
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?
Click here for a free one-week trial to Kevin Haggerty’s Professional
Trading Service or call 888-484-8220 ext. 1.
The
knee-jerk reactions to announced news–both
economic and earnings–are in force right now as the media hypes as usual and
most of the time doesn’t have a clue. Last week it was the low GDP number and
Hamas election, in conjunction with month-end. The SPX was +1.8% on the week,
with the Dow +2.2%, QQQQ, + 2.1% and Nasdaq, +2.4%. NYSE volume was on the
heavy side last week, with the 5-day average volume of 1.89 billion shares with
a 1.6:1 ratio of upside to downside volume and the same ratio for the net
difference of advances minus declines. Outperforming the SPX on the week was the
XBD, +4.8%, XAU, +4.7%, CYC, +4.2%, BKX, +2.6% and SMH, +2.2%. On the interest
rate front, the TLT was -2.0% on the week. The current internals are into the
short-term overbought zone, with the 4 MA of the volume ratio at 62 and breadth
+762. Month-end Generals activity this week would extend this short-term
condition.
Daytraders who concentrate on energy stocks
should of had an excellent week, especially if you are using the Trap Door and
Gap Pullback strategies (First
Hour trading module). The semis and other technology stocks were also a
source of many trading opportunities, along with the commodity stocks. Suffice
to say, many of these stocks gapped and are very extended. The major indices are
all above the line, with the SPY and QQQQ having bounced off their 50 DEMAs,
while the weaker DIA bounced off a 106.45 low vs. the 200 DEMA of 106.04,
closing Friday at 109.11 and above all of its 20, 50, and 200 DEMAs. Initial DIA
resistance is 109.59. IWM and MDY both made new closing bull cycle highs last
week. Trader’s risk is better confined to daytrading after the 5-day bounce off
the recent lows and you should expect weakness after month-end and the February
new money
Have a good trading day,
Kevin Haggerty