From 1990 to 1997, Kevin Haggerty served as Senior Vice President for Equity Trading at Fidelity Capital Markets, Boston, a division of Fidelity Investments. He was responsible for all U.S. institutional Listed, OTC and Option trading in addition to all major Exchange Floor Executions. For a free trial to Kevin’s Daily Trading Report, please click here.
Commentary for 10/8/12
The SPX 1474.51 high on 9/14 was followed by a -3.0% pullback to 1430.53 on Wednesday [9/26], and was down 4 of 5 days last week to finish -1.3% that week to 1440.67. The index finished +2.4% for September and +5.8% for the 3rd QTR, so the Generals that essentially track the S&P 500 are happy, but the majority of active managers, and also many hedge funds are still chasing performance.
October started with the SPX up 4 straight days and +1.5%, then we got the BLS obvious fraud unemployment report Friday, which just happens to be the last one prior to the election. What a surprise! Santelli on CNBC had predicted that the UE rate before the election would be the same [7.9%], or lower then when Obama took over because of obvious political reasons.
One of the best comments/tweet I read after the bogus report was by Jack Welch of GE fame “Unbelievable jobs numbers, these Chicago guys will do anything, and if you can`t debate change the numbers”. It wasn`t the BLS statistical arbitrage, but it was more like statistical fraud.
The SPX had the initial hyped jobs bounce hitting 1470.96 on the 10:25AM bar versus the +1.0 VB at 1470.93, and most of the Trading Service members faded the fraud number with a 3 bar reversal short entry below 1469.79, which traded down to a 1456.89 intraday low from the 1470.96 intraday high based on the hype of a UE bogus number.
The SPX finished Friday -.03% on the session to 1460.93 after 4 straight up days, and +1.4% on the week. The index remains O/B on a monthly basis, and has a 123 negative 5 RSI divergence into the 10/6/12 Pi time symmetry.
High Probability-Low Stress Day Trading
MON is a Trading Service Focus stock because it is what I call an Above-the-Line stock. I have included a current 3 day sequence of defined strategy trades in the stock, but the strategies apply to anything you trade including Futures, ETFs, Bonds etc.
On 10/3 the initial over reaction and ridiculous electronic execution resulted in a 87.57 low on the 10:05AM bar, or -3.7% from the previous 90.94 close. That was enough to hit the -3.0 VB zone [99% probability] and the 50DEMA at 87.50. There was no question about taking the signal bar entry above 87.94, and the stock ran to 89.80 on the 11:35AM bar. The daily chart is excellent, and in this setup there was extended -3.0 VB symmetry, as well as the 50DEMA, so you had very good reasons to take the high probability trade.
The next day [10/4] the stock opened up and formed what I call the 1st Consolidation B/O to new intraday highs. The entry above 89.68 was at a lower VB level, but the B/O above 89.68 ran to 90.51 which was right at the +2.0 VB [95%] and then B/O of a sideways range to make a 91.27 high with the +3.0 VB at 91.49. Some traders exited the trade at the +2.0 VB zone, while others exited half a position and stayed with the balance as it was trading mostly above the 8EMA.
On Friday the stock had another modest gap-up opening, but pulled back from the opening bar 91.40 high to 90.78 The trade was to take the 4 bar opening range B/O to new intraday highs above 91.40, and all of the EMA`s, in addition to the previous day high on the 9:50AM bar. It also B/O to new all-time highs above 91.57. The trade was exited on a signal bar reversal below 91.92 versus the +1.5 VB [88%] at 92.10, and the 92.12 high. The SPX had reversed from its intraday hyped UE 7.8% rate 1470.96 high, so there was no market reason to delay turning in the successful rental on MON, and go home flat as you always should when you day trade.
You can download for free 6 of my calculators that I use to measure price and time symmetry at www.geometricmarkets.com, and my new 200+ page manual “Markets Trade With Geometric Symmetry” is also available for purchase on the site. It doesn`t matter whether you are a trader, investor, portfolio manager, or analyst, because this product will enable you to pinpoint high probability reversal zones in any market, including Stocks, Bonds, Commodities, and Currencies.
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