Daytraders Prosper on Inferior Electronic Openings
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.
The $INDU increased for the 6th straight day to
12809, while the SPX was -0.1 to 1470.73. The QQQQ was -0.3% on Wednesday
when the SMH was +2.8%, but it reversed to +0.3% yesterday, with the SMH +1.2%,
and now at the top of its trading range since 8/28/06. The $COMPX declined
for the 3rd straight day at -0.2% to 25.05. The erratic price action is
not unusual for an option expiration week, especially when it also accompanied
by the emotional responses to earnings season news. The internals declined
for the 3rd straight day, as the volume ratio has gone from 80 to 50, 48 to 40
yesterday, while breadth has declined from +1518 to -97, -393 and -918.
This is not what you expect to see as the SPX makes new cycle highs this week.
Daytraders continue to prosper from the significant discount and premium
openings that the illiquid Globex market now controls because of the inferior
9:30 AM process that is mostly electronic, and almost no NYSE specialist
participation in the opening process, due to the new hybrid system.
Yesterday was a common example of the extended
opening-period move generated from the futures trading pre-9:30 AM opening.
The DIA closed Wednesday at 128.04, and opened yesterday at 127.33, with a 1st
bar 127.32 low. This was a -1.0 Volatility Band decline on the opening bar
to the 240 ema, which also set up the RST reversal strategy, so it was a high
probability trade for the daytrader. It ran to 128.27 before closing at
128.23. All my strategies about how to use my Volatility Bands are
available in the trading modules, and are utilized daily in the trading service.
Today might be the reverse of yesterday, as the SPX futures are +6 points at
8:15 AM as I complete this commentary.
There is a long-term Fibonacci calendar day count
this week from the 3/24/00 SPX 1553 high, and this index is extended, as you can
see on the 3-month standard deviation chart, so where is your trading edge?
The answer is obvious.
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.
