Gaming of the futures creates intraday reversal strategies
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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For traders yesterday,
it was semiconductors and commodity stocks like energy, copper and gold.
The OIH and XLE never pulled back after strong openings, but some of the
component stocks did, and if you were scrolling for them you got trade
opportunities. NEM was an excellent RST. The SPX closed at 1301.67, -0.3%, and
the best trading opportunity was when it traded down to 1298.26, with the -1.0
volatility band at 1298.52 and the 816 EMA (5-minute chart) at 1297.67 (also an
RST). The initial minor support for the SPX is 1297 – 1295, so the level has
symmetry.. It is expected that the Generals will support and mark up prices into
the end of the first quarter, which ends next Friday.
The market action away from the commodity and semiconductor stocks was benign.
NYSE volume was 1.44 billion shares, volume ratio 47 and breadth also neutral at
-124. The Dow was -0.4% to 11,270 and the QQQQ -0.3% to 41.09. The OIH
finished at +2.3% and the XLE +1.5%, while the SMH was -.03% after being up over
+1.0%. However, focus semiconductor stocks like NVDA, MCHP and MRVL all had
strong up-moves. The commodity stocks and semis obviously remain a primary focus
through the end of the quarter.
Trading opportunities continue to be more prevalent on the over-reactions to
news, as the futures are artificially gamed, and also from the program trading.
This sets up the reversal strategies like Trap Doors, volatility bands and RSTs,
just to name the primary ones. I refer to them often in this commentary and they
are available in the
trading modules and
seminar material. The new trading service provides stock technical data
research, specific price and time zones, trading ideas on how and when to use
the strategies, and much more. That information will not be available in this
commentary.
About 60% – 65% of the primary institutional holdings/winners that can get
marked up next week are in the financial services (mostly brokers) healthcare,
industrial materials and energy sectors.
Have a good trading day,
Kevin Haggerty