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 7/18/12
The inverse relationship of the major indexes and commodity ETFs versus the dollar continues to be a significant bonus for day traders, and yesterday is just one of many examples as to how it can be so profitable for day traders, especially when there is other symmetry.
The SPX made a 1325.41 low last Thursday, and was S/T-O/S after 6 straight down days, followed by a squeeze on Fri with the SPX +1.7%. Monday was a pause day as the SPX daily range was the smallest for the rally that started with the 1266.74 low [6/4] from the key price and Pi time zone.
The SPX chart examples from yesterday outline the bonus day trading moves, and the other logic for taking the trades. The UUP was the inverse image of the SPX as you see on the chart with the price action on the 9:40AM, 10:00AM, and 10:50AM bars.
The initial SPX short below 1360.32 on the 9:40AM bar was taken more because of the gap-up opening with the SPX making a 1361.32 high versus the previous the 7/10 1361.54 high, and the .618RT to 1422.38 from 1266.74 at 1362.94 However, the UUP also popped on the 9:40AM bar, although it was only above the first two bars, but it was also in the inverse direction which was positive.
The SPX and UUP both accelerated on the 10:00AM bar as the Bernanke Senate nonsense started, so that was also another short opportunity below the 9:50AM bar 1355.32 low. The index declined to a 1345.07 low at the 816EMA zone and the 1345 minor support range from last week.
Also, the 1345.07 low was in the Fib RT zone to the 1325.41 low, and all the more reason to take the SPX reversal entry above 1346.65 on the same 10:50AM bar that the UUP reversed it doji bar high.
The commodity ETFs like GLD, XLE, OIH, XOP, and XME all made the same inverse moves as the UUP. The GLD was the trade selected after the 152.45 low versus the -1.28 VB at 152.51, so the reversal entry was taken above 152.75 and exited on a 4 bar reversal below 154.17.
When the dollar is moving the market it is better to focus on the major indexes and commodity ETFs because of the consistent inverse relationship. You can also take a 1 Week Free Trial membership to my Trading Service on the TradingMarkets site for more information on the basic day trading strategies and related symmetry.
In the Trading Service I also outline and explain all of the geometric market symmetry so that you can anticipate high probability market price and time turning points. My next commentary on TradingMarkets will be Mon 7/23/12.
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 Manual will enable to pinpoint high probability reversal zones in any market, including Stocks, Bonds, Commodities, and Currencies.
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.