Focus on Generals’ 2006 Winners
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 last week of 2006 started from a short-term
oversold momentum condition, and both the SPY and DIA had pulled back to their
20 dema. The IWM had retraced to the 50 dema, as did the QQQQ to minor
support and the 50 dema. The most oversold with 5-RSI below 20 were the
IWM (18.40), MDY (19.40), QQQQ (18), XLK (18.95) and $TRAN (14.19). The
SPX and DIA were 32.29 and 30.63 while the SMH was 25.65. The SPX
year-to-date gain as of last Friday was +13%, so all the generals have to do
this week is maintain the levels to lock in their 2006 performance numbers.
Traders benefited starting this week, which has an upward bias, from the
short-term oversold condition. For example, the DIA closed on the intraday
lows Friday (123.18), which put it in an RST reversal zone. Entry
yesterday was above 123.24, and that traded up to 124.01 before closing at
123.97. There was a second opportunity if you missed the RST, which was
the 1-2-3 higher bottom entry above 123.45. These strategies and much more
are outlined in the trading modules.
There was no selling pressure yesterday, and
price advanced on extremely light NYSE volume of 790 MM shares, with the volume
ratio 71 and breadth +1262. After 3 straight declining days, the SPX
bounced and was +0.4% to 1416.90, and the $INDU +0.5% to 12408. The QQQQ
was +0.4% to 43.11, which is right at the 43.12 50 dema. The energy sector
was also trader-friendly yesterday, as the OIH pulled back to the .382
retracement zone (150.98-118.19). The intraday low was 138.59, which was
also a VB zone, in addition to other symmetry which we anticipated in the
trading service. There were similar successful VB setups in many of the
component stocks.
The trading focus into year-end remains on the
generals’ major holdings and leading gainers of 2006, because that’s where the
“games” are being played. This will all change in Q1 2007, as will the
focus, and the current unsustainable 30-degree angle of advance for the SPX
since the July lows. I will expand on this next week.
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.