Key Price and Time Symmetry in Play
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 current SPX rally is 13 days old, and +13.0% low to high from the 869 low (7/8/09) to yesterdays 982 intraday high, before it went out at 982.18. It has been a very light volume rally, which has been driven by a smaller universe of stocks, especially the technology sector.
This is evidenced by the bullish percent indicator which went out yesterday at 70, versus 74.80 at the May high, and 74.40 at the June high, while the broader based NYA finished at 69.38. The BPI for the Nasdaq 100 finished at 85 to lead all major indexes and major sectors.
The SPX broke out to new rally highs last Thursday as it traded through 956, and closed yesterday at 982.18. The Generals and hedge funds have a mark up ax to grind because it is month end this Friday, so I don’t expect any significant pullback. However, next week has some key time symmetry, and that is when this extended short term advance is most vulnerable to a reversal.
There is a negative momentum divergence setting up in the QQQ, which had hit a 5 RSI of 95.27 last Thursday, at the .618RT zone to its 10/31/07 54.69 bull market high, and there is also one in the OIH, so they are both early reversal warning signs, in addition to the obvious the 13 day vertical price spike in the major indexes.
The next key Fib price symmetry in play is the .382RT to 1576 from 667 at 1014, in addition to a key angle at 1013. There is also angle symmetry at 997 and 981, in addition to the Fib extension levels of the last leg down from 956 to 869 at 980, 992, and 1010.
Have a good trading day!
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