Short-term trend remains intact
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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The early rally in the major
indices turned trend-down after 10 a.m. as the SPX traded down from a
1274.56 intraday high to a 1263.78 close, -0.1%. Three of the four closes this
week have been at the 1265 level. The Dow closed at 10,884, +0.2%, led by some
of the sub-200 DEMAÂ stocks like
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PowerRating), [MMM}MMM], and
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PowerRating), all
+1.6%. The energy stocks opened on a gap-up, but reversed by 10 a.m. and headed
South with the XLE taking out Wednesday’s low. The QQQQ was -0.9% and Nasdaq,
-0.5%. Gold led the upside in the sectors, with the XAU +1.5%, while the OIH led
the red team at -2.8%. The SMH was -0.3% after three up-days. NYSE volume was
1.8 billion shares, volume ratio neutral at 50 and breadth +263.
Traders got opportunities in the semis in the
morning, but only in a few energy stocks due to the gap up. The SPX hit the wall
at the 1276 resistance level, so it all depended upon your bias whether to play
the short side in the futures/SPY. The energy stocks are the most oversold in
the SPX so there will be action in that sector today. The SPX closed last
Friday at 1264.03, -1.4% on the week, and then 1265.02 on Monday, 1265.64
Wednesday and 1263.78 yesterday. The low this week is 1254.78 into this current
time period, which was anticipated after the last key price and time zone of
1291 – 1296 and 1/11/06 – 1/13/06. Because of that, the short-term bias on
weakness is to the long side for continuation from Wednesday’s 1254.70 low,
which is the lower trend channel line, 89 DEMA and the short-term oversold
condition.
Have a good trading day,
Kevin Haggerty Â
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