Haggerty: Key Price and Time Week
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 last commentary was the morning of 11/5, following the SPX 1046.50 close, and the SPX has since rallied +7.4% from the 1029.38 low on 11/2. The INDU and QQQ have closed at new rally highs, while the SPX made a new high yesterday at 1105.37, but closed at 1098.5, and below the previous 1101.36 high on 10/21. The NYA, IWM, MDY, COMPX, and TRAN have yet to make new rally highs.
The $US Dollar “carry trade†continues to be the accelerator for the market in both directions. NYSE volume has significantly declined on this rally, so it sure as hell isn’t the Generals driving the market higher. The Government misinformation and disinformation spread by the media to hide the true state of the economy, and actual risk to the financial institutions, has accelerated.
The Fed is in panic mode as it continues to spike the monetary base, but the broad money supply continues to decline, and that is very negative because the banks are simply not lending, and there toxic asset problem is getting worse not better as the 10.2% unemployment rate is much higher than worst case estimates by the Fed, and the current Socialist Administration. The empty suits on CNBC keep hyping the daily array of Government economic reports that indicate no more than an economy that is bumping along the bottom.
This is a key week for the market in both price and time, because the INDU has reached its .50RT level (10333) to the 14198 2007 market top, and the SPX has also, seeing that the 1105.37 high is only -1.4% below the 1121 level. It is the zone that matters, not the exact RT level. There is also a cluster of time symmetry this week, but the most important is that it is the .50RT in time versus the 352 day decline from the 10/11/07 1576 high to the 3/6/09 667 bear market low, in addition to the fact that the market is ST-O/B so the probability obviously favors a short term reversal, and it is definitely not a buy zone. The reversal would be a positive for short term traders because it would set up a decent seasonal year end trade.
No comment on the Pelosi bill passed in the House, and what it would do to the economy, and just about everything else, but I think you could write my comments for me.
Have a good trading day!
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