It’s the Timing, Not the News

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 6/2/11

The SPX advanced 4 straight days and +2.2% into month end [5/31], but the month of May was still negative at -1.35%. The short term downtrend for the SPX remains intact, despite having traded and closed above the down trend line on the last day of May at 1345.20, but not above the previous 1346.82 swing point high.

However, the market had a mini meltdown yesterday as the SPX was -2.3% to 1314.55 on the continuation of negative economic news, despite the media and Administration contra spin. The following paragraph is an excerpt from the Trading Service commentary published for 6/1/11 after 5/31 trading day.

“The economic news is weak, the housing market continues to sink, GDP can`t get out of its own way, unemployment remains high, food and energy prices are strapping the consumer, regardless how the media spins it. However, the Fed will continue to try and manipulate the market higher, but that will be more difficult if the market doesn`t correct, because right now reality is in La-La land”.

Yesterday, the economic news went from bad to worse, and of course it was all unexpected as always reported by the bias media. I wonder what they pay those people who make up the so called expected numbers. The validity of reported economic numbers continue to deteriorate, and it has become so ridiculous and unbelievable that even the empty suits on CNBC have to acknowledge it because they are probably getting so much flack from the real world. You kow something is wrong when you see a headline on CNBC such as “Is Economic Data BS?

The spin is now that this “unexpected slowdown” is just a patch, and the second half of 2011 will be different [sound familiar] but the better guide is the technical market action of the US because, that is reality for most long term investors.

In the previous commentary [Timing Reality and the Market] I outlined the significant time symetry in mid-June, and the SPX correction looks like it wants to extend down to the 1260 200DEMA zone which is just -4.1% from yesterday’s close, and only an -8.1% correction from the 1370.58 high.

Investors have become so complacent that the Fed will continue to control this market, but it is a very nervous short term oriented market right now, and it doesn`t take much to trigger an airpocket. However, if the SPX declines into mid June and the 200DEMA zone, it will be a position trade buying opportunity.

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