The Most Powerful Trading Edge
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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In the previous commentary for 1/25, I said that a continued advance from the
SPX 1352.07 Thursday close puts traders on the short side again, and that the
initial resistance zone in play was 1364-1371. The SPX hit 1368.56 on the
9:35 AM bar on Friday, which set up the RST reversal strategy and the SPX
declined to 1327.50, before closing at 1330.61, so it doesn’t get much better
than that for traders. There was also significant time symmetry last week, and
the SPX hit the key price zone at 1268-1274, which started the spike up, and the
SPX ran +7..8% to the 1368.56 high from the Wednesday 1270.05 low. It is unusual
volatility, but two key price zones come into play in a key time week. It can
only happen on a vertical move, and that is what occurred.
The SPX hit the .382 retracement to 1270.05 on Friday, which is 1330.82, and
that is the beginning of the 1270.05 test, or else a reversal to new bear market
lows. If it was a strong reversal and a new bull market, which I certainly don’t
think it is, a 1-2-3 higher bottom reversal > 1368.56 from this .382 retracement
zone, or else a 1319 .50 retracement level is what you would want to see. There
can be no change in trend until there is a higher low and higher high ( >
1368.56) sequence, and position traders have lost their initial edge if they
didn’t capitalize on the 1268-1274 key price and time zone. The key levels and
zones in play are always anticipated and outlined in the trading service.
Consistent with my “Core Framework,” the most significant zones and best trades
come from the extended Standard Deviation levels that are also key price and
time zones, and this includes all time frames, so it doesn’t matter if you are a
daytrader, a swingtrader or a long-term holder, you must understand how it all
interacts to be at the top of your game.
The SPX futures are -7 points as I finish this commentary, so if it persists
and forces a discount opening, daytraders should anticipate the initial downside
SPX levels at 1319, then 1310-1307. This is also a month-end week, and I expect
the SPX 1270.05 to hold up, but there is no significant short or long edge as
there was last week, so it is business as usual for traders using my strategies.
Check out Kevin’s strategies and more in
the
1st Hour Reversals Module,
Sequence Trading Module,
Trading With The Generals 2004 and the
1-2-3 Trading Module.
Have a good trading day,
Kevin Haggerty