Morning ‘air pocket’ triggers buy strategies
Kevin Haggerty is a
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Markets for seven years. Would you like Kevin to alert you of opportunities in
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Traders got some needed intra-day volatility yesterday from
the economic and earnings reports. The gap down openings and morning trend
down put the SPY, DIA, and QQQQ at the -1.5 VB levels, and .50 retracement
levels to previous lows for the SPY and DIA. This activated the buy
strategies for the ensuing contra move, where the DIA traded from 118.87 to 119.75
and the SPY from 135.67 to 136.70 before closing at 136.41. It was a good
day in the trader’s office. The modules to learn the various strategies
are listed below. Once again, there was an uptrend that started at the
noon hour, and the $INDU reversed +63 points from 11897 to close at 11950.
The “gang” is determined to take out that 12000 magnet, regardless of any
negative news.
NYSE volume was 1.52 billion shares, and in spite of the
afternoon rally, the volume ratio was just 30 and breadth -791. The
downside was led by the semis, with the SMH -2.3%, mostly due to the Intel
earnings report. I assume “they” will try to spin it the other way today.
The SPX finished at 1364.26 (-0.4%) and the $INDU (-0.3%) to 11950. The
QQQQ’s, hurt by the semis, was -1.1%. Energy stocks reversed after 3
straight up days. The OIH and XLE were each -1.1% after runs of 7.1% and
6.1% the previous days. This midterm rally has coincided with falling oil
prices, and this corner thinks that oil will break $70 before it breaks $50.
In addition to more recession-type news, it is not a good combination for the
market.
There are many other significant technical negative
divergences in this market that will probably not come into play until the
midterm election rally game is over, when maybe Nancy Pelosi is the Speaker of
the House, which seems to be the higher probability right now. From an
investor’s standpoint, the market remains over-valued, over-bought and
over-hyped with the worst risk/reward since 2000. It continues to be a
trader’s market only. Since 2000, the buy and hold investor has done
better at short term money-market instruments, and that will remain so for the
near future.
Have a good trading day,
Kevin
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.