Excellent volatility for traders in these sectors
The 1/11/06 SPX
price and time zone high of 1294.90 remains intact
on a closing basis after another week of narrow range trading with just a 1.3%
spread between the high and low of 1280.66. The SPX closed the week at 1287.63,
-0.2%, as did the Dow to 11,022. The divergence was the Nasdaq, 2304, and QQQQ,
41.45, both +0.7% on the week. NYSE volume was 1.55 billion shares on Friday,
with the volume ratio 44 and breadth -597. The 4 MAs are very neutral, with the
VR 45 and breadth -230. Traders continue to make money in the commodity-related
stocks as the OIH was +2.3% last week and the XAU +1.2%. Both the energy and
precious metal sectors continue to have excellent volatility for traders. The
TLT took a hit at -1.9% last week and -1.3% for just Thursday and Friday. The
10-year note yield made a new high to 4.68%, up from 3.89% in 06/05.
Friday’s action in the SPY is similar to what we
have seen since the 02/27/06 130.04 high. The SPY opened Friday at a significant
discount to 128.65 on the opening bar, which was the -1.0 volatility band. The
contra move advanced to 130.07, which was the exact +1.0 volatility band, and
then reversed again down to a 128.76 close. Who said it isn’t a casino? The
02/27/06 high is 130.04, which traded down to 128.13, then back to 130.07 on
Friday and of course down to the 128.76 close. RST traders are alert if the
128.13 low is taken out. The casino lights are slightly green at 7:45 a.m. ET so
it will probably not happen on the open unless there is some more Mickey Mouse
news like INTC on Friday. There was nothing new about INTC; the company
had already announced that revenues would be down a month ago, but that didn’t
stop the the pre 9:30 a.m. manipulation in the Globex futures market and the
ensuing media panic mode. As traders, we are just "thanking you, CNBC" for
the trading assist on Friday’s opening. The $CRX has been consolidating at the
50 DEMA since mid-February and closing at the top of the range on Friday, so
keep a heads up on this index for a related move in the different commodity
stocks.
Have a good trading day,
Kevin Haggerty
