High Probability-Low Stress Day Trading

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.

Commentary for 9/26/12

The SPX was +1.6% on 9/13 when Bernanke gave Obama the QE 3 election gift followed by a +0.4% day with a new cycle high at 1474.51, and closed the week ending 9/14 +1.9% to 1465.77.

The artificial US market was O/S on a monthly, weekly and daily basis in front of that geometric triangle date time symmetry beginning on 9/17, mentioned in that commentary [The Bernanke Panic Gift to Obama].

The SPX consolidated after the 1474.51 intraday high and only declined to 1449.98 before closing last week -0.4% to 1460.15. However, this week the SPX hit a 1430.53 low today, down from the previous 1441.54 close, and it was -0.2% on Monday and -1.1% yesterday.

So far the SPX has only pulled back -3.0% to the 1430.53 low today from that 1474.51 Bernanke high, and the SPX implied volatility [AIV] used in the Trading Service made a new 52 week low. The 3rd QTR ends Friday, and the SPX is +5.8 % for the QTR as of yesterdays close, so the Generals will hold it for the next couple of days.

With the implied volatility so low there have been more contracted volatility 1st hour strategy opportunities as opposed to extended VB setups, because the intraday travel range is obviously much tighter since the 1475.51 9/13 high. I have included two specific CV setups from yesterday in AMGN and CELG, both of which are TS focus stocks as they are both on the Above-the-Line trading list in the Service.

The entries in both AMGN and CELG were taken on the 9:50AM bar, with AMGN advancing to the +2.0 VB band before exit. It traded above the 8EMA for the entire advance, which always makes trade management easy, but it was out after that at the +2.0 VB.

CELG was another CV setup, and the entry obe 77.13 was exited on a 6 bar reversal below 77.68 following the 77.80 high versus the +1.0 VB at 77.80, and the 11:00AM AMGN exit. Both stock entries were also above all of their EMA`s on the 5 min intraday chart, so they were obviously High Probabilty-Low Stress Day Trading selections, which is the title and content of my next Book/Course.

Ponzi Scheme or not, 2013 will be an extremely dangerous time for the markets and the country, regardless of who wins the election, so you better have a preservation of capital plan, and plenty of cash on hand to take advantage of the next, and definite significant bear market in equities and bonds.

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