Key Price and Time Zone

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 5/18/12

The SPX closed at 1353.89 on 5/11/12, the date of the previous commentary [Markets Trade with Geometric Symmetry] and was -1.1% on the week. You were alerted in the 4/23/112 commentary that there was no reason to buy the long-term O/B market with the 5 month 5 RSI negative divergence regardless of the heavily weighted bullish hype.

I said the path of least resistance for the SPX was still down, and after any reflex bounce the SPX would most likely trend down to at least the 200DEMA zone [1314], just as the NYA, IWM, and TRAN had done. I also said that there was geometric price and time symmetry in mid to late May to the middle of June, and any decline to the zone would be the next positive position opportunity.

The key price zone is [1314-1290] which is the 200DEMA down to the 10/27/11 1293 B/O high and 1290 which is the SPX .382RT to the 1074.77 10/4/11 low from the 1422.38 cycle high.

The SPX closed at 1304.86 yesterday [-1.5%] and was -3.6% on the week coming into today, which is the 1.5 Fib extension in time of the 10/10/02-3/6/09 bear market lows [2339 CD] measured from 10/10/02 by using my Fib Time Ratio Calculator, which is one of my 6 price and time calculators offered for free on, in addition to the manual “Markets Trade with Geometric Symmetry”.

The SPX is in a time and price zone, extremely S/T-O/S with the daily chart 5 RSI at 6.16 yesterday, and the intermediate 5 RSI is also in the O/S zone at 23.15 The May seasonal is on track for the 3rd straight year and the SPX has declined -7.8% from the 5/1/12 123 Lower Top at 1415.32 in 12 days, and -8.3% from the 4/2/12 1422.38 high, so this is the first key price zone since the 1422.38 high.

The USD [UUP] advanced 12 straight days from the 5/1/12 21.76 low with support at the 21.74 2/29/12 low. That has been the major catalyst for the equity decline, in addition to the acceleration of macro negative news and uncertainty in the Euro fiasco etc. Timing of the vertical USD advance with a significantly O/B market was even too much for the CNBC empty suits to overcome with their daily bullish US economic hype.

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