It’s tough to spin GDP numbers
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
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The SPX was -0.9% on Monday for a 1377.34 close, and
the Generals made sure there would be no more weakness into month-end, closing
the last 2 days at 1377.86 and 1377.44. The 4 MA of the volume ratio was
neutral at 46 and breadth +402. The SPX was +0.5% the past 7 days, while
the TLT was +3.8%. The bond market continues to bet on a significant
slowdown, while the attempt to spin it otherwise is in motion before the
election next week. It is tough to spin the GDP number on Friday, which
was +1.6% vs the current expected +2%. However, what was not mentioned was
that the original consensus was dropped from +3% to +2%. The same game is
played with earnings every day. The Federal Reserve tried to save the
economy in 2001 with rate cuts, and obviously failed as stocks went south into
the October 2002 769 low.
With 5 days left until the elections, we might see another one
of those “mystery” 1-day futures-induced up-days like the 5 we have had since
the 1327 SPX high was taken out. These 5 days have accounted for 85% of
the gains until last Thursday’s 1389.45 SPX bull cycle high. Daytraders
had a big day yesterday in the energy sector with RST buy opportunities in the
OIH, XLE and component stocks like SLB. The OIH ran +2.4% from the 131.17
entry level, XLE +2.2% and SLB +1.8%. The morning decline in the major
indexes took the SPY down to a 137.25 low, with an RST entry above 137.37 set up
at the 816 EMA. It ran to 138.06 before closing at 137.98. There was
also other significant symmetry with the energy and SPY setups. The SPX
may have finished flat, but daytraders who utilized the strategies from the
modules listed below had an excellent trading day. Until the elections are
decided, daytraders should favor the major indexes and ETFs.
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.