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.
The SPX closed at 1096.48 on 7/15 versus the 1094.80 200DEMA at the time, and it was essentially a 3 bar high having closed at 1095.34 and 1095.17 the previous two days. In the previous commentary for the morning of 7/14, I said that the SPX was +8.8% in just 7 days and was ST-O/B after the “V” bounce of the 1010.91 low at the 1009 .382RT to 667 from 1576 and that the odds favored a pullback, which is exactly what we got.
There was some key time symmetry on 7/15 which was 1008 calendar days from the 10/11/07 1576 high, and 1008 CD’s is exactly 144 weeks [Fib]. Also, 7/14 was TD 8 from the 1010.91 low and TD 55 from the 4/26 high. This is why the title of the previous commentary was “Market Trading with Symmetry”.
The SPX declined -2.9% to 1064.88 on 7/16, and then hit 1056.88 on Tuesday [7/20], but closed at 1083.48 [+1.1%], which was followed by a -1.3% decline yesterday after Bernanke gave a more negative than normal testimony to the “robber barons” in Congress. However, the foreign markets rallied overnight and the SPX futures are now +10.9 points following the jobs claims report after having been up +15 points at one point in the “funny money” Globex market.
The current resistance zone is from 1094-1113, which includes the 1094 200DEMA and the 1113 200DSMA. The SPX has made a series of lower lows and highs since the 1219.80 4/26 high, and is trading below both the 200DMA’s, and the 50DMA’s are trading below the 200DMA’s and the 20DMA’s are trading below the 50DMA’s. That is what I call a Below-the-Line market, and not one where you can buy high and expect to sell higher.
Buying the weakness and selling the strength in concert with key price, time and momentum strategy remains the most profitable way for traders to play the current market.
Have a good trading day!
Click here to find full details on Kevin’s courses including Trading with the Generals with over 20 hours of professional market strategies. And for a free trial to Kevin’s daily trading service, click here.