The Key Market Time Factor
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 (4/30/07), it was
noted that the first 4 days of May had a positive seasonal bias, but there is
also some time symmetry for the first 6 days of May, and there obviously has
been no pullback since the 1364 3/14/07 low. It is also the beginning of the
weak May-October period. The SPX closed Friday at 1494.07, and declined to
1482.29 on Monday. There was a continuation early decline yesterday to 1476.70,
and then the afternoon rally was timed nicely in front of the Democratic "show"
and the President’s veto speech. Ever since the period approaching the mid-term
elections, this seems to be a regular occurrence.
NYSE volume was 1.78 billion shares, the
most since 4/20/07, with the volume ratio 55 and breadth +337. The internals
turned positive after the 1:25 PM reversal, and the SPX finished +0.3% and the $INDU
+0.6% to 13136. Daytraders caught either or both of the SPX Trap Door reversal
after the 1476.70 low, and 1:25 PM 1-2-3 higher bottom, with entry above
1479.06, which ran to 1487.27 before closing at 1486.30. The best opportunities
were the 1st hour Trap Door reversals and Volatility Band levels in energy
stocks like OIH, SLB and RIG, to name a few. The OIH had pulled back from a
161.50 high on Monday to a 154.25 low yesterday, so that set up the Trap Door
reversals. There is no edge for position traders right here, because of the
extended spike rally from SPX 1364. But daytraders do have the edge, because it
is a very nervous and news-responsive market that creates extended intraday
volatility.
The SPX is +95% low to high off the 769 2/10/02
bear market low, and it is already the longest time period between market tops
in over 50 years. For the same time period, it is the 3rd longest time between
bear market cycle lows, at 1664 calendar days as of yesterday. The longest is
1898 calendar days from 8/9/82-10/20/87, followed by 1707 calendar days from
10/22/57-6/25/62. Time is obviously not market friendly, so make sure your
long-term investment house is in order.
Have a good trading
day,
Kevin Haggerty
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.