Bonus Day For Daytraders

  • August 30, 2005
  • Kevin Haggerty

Kevin Haggerty is
the former head of trading for Fidelity Capital Markets. His column is
intended for more advanced traders. Kevin has trained thousands of traders
over the past decade. If you would like to be trained by him,

href=”https://www.kevinhaggerty.com/”>click here. or call 888-484-8220
ext. 1

 

The early weakness when the SPX
(
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out Friday’s 1204.23 intraday low set up an RST/Trap Door long entry above

1202.34. The signal-bar low was 1201.53 with entry on the 9:50 a.m. ET bar. The

SPX traded up to an intraday high of 1214.28 and closed at 1212.28, +0.6%. There

was a second entry from the First Consolidation Breakout to New Intraday Highs

above 1207. If you missed both trades, your emotions got the better of good

trade logic. The other confluence is outlined on the
(
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PowerRating) chart where the

SPY made the early intraday low of 120.38 vs. the .382 retracement to 113.53 and

also the 120.73 .618 retracement zone to 118.27. Both the London bombing and

Hurricane Katrina gave daytraders bonus days from the long side.

NYSE volume continued on the light side at 1.22

billion shares with the volume ratio 68 and breadth +842. The Dow was also +0.6%

to 10,463 with the
(
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(
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strength yesterday was in the
(
SMH |
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(
IWM |
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PowerRating), +1.4%, XLV/PPH,

+1.1%, along with the RTH (retail), +1.0%.

There are two days left in the month, then the

first two days in September before the coming holiday weekend. Last year, the

SPX closed down at 1099 on 08/30 and on the last trading day before the Labor

Day weekend (09/03/04) closed at 1114, which was down from 1118 on Thursday. The

next key time zone is in mid-September, and should the SPX rally strongly into

that time period, a short-side position bias will be taken. Liquidity is thin

prior to the holiday weekend, so trade accordingly. 

Have a good trading day,

Kevin Haggerty