Key Time Period Next 6 Days
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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The major indexes didn’t give daytraders much to take advantage of yesterday,
as the indexes traded pretty much sideways for the whole day. In fact, the SPX
finished unchanged at 1447.16, while the $INDU was +0.1% to 13057 and the QQQQ
+0.4%. The sector leadership these first 2 days of 2008 is where we left off in
2007. The leadership so far is gold, energy and commodity stocks, while the
downside the first 2 days is familiar, and led by financials, retail, semis and
transportation stocks. The $HUI is +9.6% to start the year, and the OIH +2.4%
and XLE +1.5%. That compares to the SMH at -5.2%, $XBD -3.5%, $TRAN -3.4%, $BKX
-2.8%, and XLY (consumer discretionary) -2.6%. The major indexes are also red
for 2008 so far, with the SPX -1.4%, $INDU -1.6% and QQQQ -1.1%.
The same housing, writedown, tighter credit and weak economic news has
carried over, and the commodity sectors remain strong across the board with
energy, precious metals, industrial metals and also agriculture, as the "great
ethanol hoax" continues to drive food prices through the roof for little, if
any, noticeable gain. Net-net, an inflationary/recessionary scenario is
obviously not a positive for the equity market starting 2008. Elephants can’t
hide, and we will watch the price and volume action of the major index stocks to
identify any swing in sector sentiment by the Generals. There is no evidence
that the Generals have turned the hour-glass over and started buying the weak
sectors from 2007. This all means that the daytrading focus on the continuing
strong sectors remains the same until the market dictates otherwise.
NYSE volume was 1.3 billion shares yesterday, with the volume ratio 41 and
breadth +218. Today through all of next week is a key time zone with symmetry,
so we should expect volatility and/or a trend change, which can also be an
acceleration of the current downtrend, as well as a reversal. It is not a key
price zone for the major indexes yet, and the SPX remains in the downward
channel, and the short-term internals haven’t reached the oversold zone yet, so
there is no strong bias either way into this key time period starting today.
However, there is an ominous head and shoulders neckline at the 1406.70 low
close, and that is the downside magnet for the bears.
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 and Happy New Year,
Kevin Haggerty
