Daytrader’s Game into Month-End
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?
Click here for a free one-week trial to Kevin Haggerty’s Professional
Trading Service or call 888-484-8220 ext. 1.
Thursday was a +0.4% continuation day, following
2.1 billion shares (SPX +0.7%) on Wednesday. Friday reversed the +0.4% day
(1.51 billion shares) to close at 1386.95 (-0.4%), but it was on 2.1 billion
shares, and certainly inflated due to the triple-witch option expiration
activity. The SPX closed at the middle of the 1410-1364 range, with 1410
being the initial bounce off the 1374 low, then the subsequent 1364 low, which
hit the key price and time zone at 1365-1370. This zone also included the
200 dema. Until the zone is broken, the short-term trend has reversed.
The 233 dema is 1358, and the longer-term moving average that the SPX is more in
sync with in this bull cycle is the 65 week ema, which is currently 1338, and
that is a -8.5% decline from 1461.57. In this entire bull market cycle,
from the 10/2/02 low, the SPX has made only 4 previous pullbacks to the rising
65 week ema, and they are highlighted on the chart. The current decline
was preceded by negative momentum and money flow divergence. There were
several strong time factors, with the most important being the relationship to
the 7/20/98 bull market top, and the 2/22/07 1461.57 high. These two highs
have an exact Pi (3.1416) relationship.
The daytrader focus on the major indexes, ETFs
and energy sector paid handsome dividends again last week, with the weekly 45.4
point high-low SPX range, and the continued high intraday volatility of the
energy sector. This focus remains the same this week, because why get in
the way of all the random price movement of individual stocks, as the generals
and hedge funds scramble at every piece of news and media hype. The error
factor of being wrong on an index move is far less than playing a couple of
individual stocks. There are some minor time dates this week, and it is
also the Spring Equinox (3/21), so there can be some more volatility.
There are also 10 trading days left in the 1st quarter, so there could also be a
continuation of the bounce off the 365-370 zone, as the generals try to regain
some performance numbers they lost in this mini-meltdown. The FOMC meets
on Monday (2:30 PM) with the FOMC announcement on Wednesday (2:15 PM), and you
have to assume they will tell us good things to calm the markets.
Have a good trading day,
Kevin Haggerty
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.
