The SPX Extended Volatility Trade
Timing is everything as the SPX was about to break below Jan 2008 lows based on the 3/10/08 close of 1273.37.
1st Hour RST Reversal Strategy
The derivative meltdown and credit crisis continues to expand…
Derivative Meltdown Controls Market
The energy and commodity related stocks are extremely extended, but for daytraders the intraday volatility is excellent, so they continue to be the primary trading focus along with the major indexes and ETF`s.
Sector Catalysts for SPX New Lows
It will take more than spin by the Fed to prevent another meltdown move in the major indexes.
Market Symmetry and Volatility in USO and SPX
My overall market outlook hasn’t changed, which is that it remains a bear market, and the cycle low will be below 1270.
New Levels Mean New Opportunities
The major indexes spiked +26 points in the last half hour of trading Friday on the Ambac/MBIA ratings news, and you can bet that the Fed and Treasury head H.Paulson were the force behind the decision which will postpone near term pain, as they give the agencies time to raise capital.
Month End and Time Symmetry
Next week has time symmetry in play, so the $SPX contracted volatility pattern will be resolved.
Contracted Volatility is a Trading Opportunity
As you would expect with a contracting volatility situation, the short-term internals are neutral.
The Next Position Trading Edge
The rally off the 2/7 1316.75 low has been led mostly by the energy sector on the crude oil advance for this period.
No Short Term Bias for Traders
A high probability trading opportunity is best when there is both a key price and time zone in play, and there is either an oversold condition.
Market Strategy and Traders Edge
The best opportunities for daytraders and swingtraders have been trading the extended reactions both ways.
The Market Rally and Reality
It wasn’t rocket science to anticipate a decline from a key price and time zone after the SPX had gained +9.9% in 8 days.