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 finished the week with a -1.6% day to 1192.13, and the catalyst was the Goldman Sachs ^GS^ fraud case initiated by the SEC, but surprisingly it was only a 3-2 vote to go ahead with the action that GS has been aware of for nine months.
It is no coincidence on the timing of the action in front of the proposed financial reform bill in Congress, and also Obama’s grandstand speech in lower Manhattan in which he will declare that there will be another imminent financial catastrophe if the bill isn’t passed. I don’t know why he doesn’t just address the 5 major banks that hold 97% of all derivatives, rather then painting all of Wall Street as the enemy.
The problem is that “we the people” have no agency to go after the Government, which is the root cause of the “panic of 2008”, and our Country’s continued economic demise.
The volatility has collapsed as the market traded higher, so day traders don’t get the good intraday travel range to work like we did yesterday. The SPX opened down small, then traded up to 1197.10 before reversing and giving traders a strategy short entry below 1193 that traded down to an 1183.68 intraday low with the -1.0 VB at 1182.70 and 20DEMA at about 1183.
This set up the RST reversal strategy with entry above 1185.73, which traded up to the 1197.52 close in the last 2 hours. Another coincidence??
An extended market doesn’t need much of a reason to pullback, especially when it is in a key price and time zone like we are in now. The SPX made a new rally high at 1213.92, which is only -1.2% below the 1229 .618RT to 1576 from 667, and is also +82% from the 667 low.
There have been 15 bull cycles since 1953, and 10 of them (67%) have advanced from 60-90%, and the last one from 2002-2007 was +105% following the 50% Tech Bubble decline to SPX 769 (10/10/02). However, the economic and financial conditions in Washington were much more conducive back then for business and the consumer than they are now with the tax, borrow, spend, and wealth redistribution policies under the current administration.
It is not a BUY and Hold market, so you must have a plan to reduce your equity allocations into this bull cycle within a secular bear market. I outlined this in my previous Market Call which is still available at the TradingMarkets site.
Have a good trading day!
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