Key price zone for the SPX

Kevin Haggerty is a full-time professional trader who was
head of trading for Fidelity Capital Markets for seven years. Would you like
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It was the tail wagging
the dog yesterda
y as a 3:40 pm futures attack took the SPX down about
eight points into the 1256.58 close and -0.4% on the day. This of course negated
the initial upside reflex to the 1273.67 intraday high. Most of the brokers on
the NYSE could only stand around and watch because it wasn’t your normal working
order selling. The casino was once again being run by program agendas of
different sorts. I thought it was interesting that the selloff occurred just
before the Dallas Federal Reserve president’s little ‘get tough’ inflation
speech The Dow was -0.2% to 11,098 and continues to frustrate the media as they
have had to put their “12,000 Dow” hype recording in the drawer. They, of
course, were loudest right at the 11,670 high. The classical technical analysts,
on the other hand, are moaning about the non-confirmation by the Dow to confirm
the transportation index all-time high. But of course if they work for a
brokerage firm, they put a positive spin on it. Good forecasts sells stocks, bad
ones don’t. The $COMPX was -0.7% to 2159 and QQQQ -1.0% to 38.59. The Nasdaq is
-9.1% off the 2375.54 04/20/06 high and is at the .618 retracement (2159) to the
10/13/05 20.26 low. Both of these are trading below their declining 200-day EMAs.

NYSE volume was 1.9 billion shares, volume ratio 47 and breadth -254. The
commodity sectors were the leaders on the strong early move yesterday but faded
late in the day. The XAU was +1.7% and OIH +0.4%. The semiconductors led the
downside, with the SMH -1.8%. The SPX is back to the key price zone, with the
1262.78 200-day EMA, 1255.67 233-day EMA, in addition to the 1254 .618
retracement to 1553 from 769, and a key angle level from the 1326.70 high at
1254.78. The IWM closed at 70.18, right at the 70.28 200-day EMA. It is a key
price zone for the SPX and a short-term oversold condition, so the odds favor a
bounce–but not to new highs

Have a good trading day,

Kevin Haggerty