Key Time Period Anticipated Volatility
Kevin Haggerty is a
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The key time symmetry period started on Friday with a -2.5% decline for the
SPX, which made it a -4.6% week, and the biggest weekly percentage loss since
the week ending 1/27/07. NYSE volume expanded to 1.64 billion shares, with the
volume ratio only 7 and breadth -1709. The semis led the downside on the week
with the SMH -10.8% and INTC taking the big hit at -15.3%. The $TRAN was -8.2%,
RTH -7.5%, $XBD -6.9%, $BKX -5.8% and XLY -5.1%. The same downside leadership we
had in 2007 starts the new year. Gold had a big week, with the $HUI +7.3%, while
the $US Dollar declined -0.5% and the bond market rallied on the continued
economic slowdown news. The 10-year Treasury yield is back down to 3.85% while
the TLT was +1.9% on the week to 94.27. Since their cycle highs, the $BKX has
declined -31%, $XBD -29%, XRT (retail) -31%, XLY (consumer discretionary) -24%
and the $TRAN -22%. The SPX has declined -10.8% so far from the 1576 high on
10/11/07 to 1406 and closed Friday at 1412.
The SPX and $INDU are short-term oversold with the 4-ma of the volume ratio
at 28 and 5-RSI at 13. They are also extended to their 1-year -2.0 Standard
Deviation channel bands, after declining into this key time period anticipated
in the previous commentary (Key Time Period Next Six Days), so a technical
bounce is obviously anticipated. If the 1406.10 low (12/18/07) is taken out
first before they rally, maybe we will see another one of those mystery moves
like we had in the last hour on 8/16/07 following a 1370.60 low, when the SPX
closed at 1411.27. That was the day that Treasury Secretary Paulson had lunch
with Fed Chairman Bernanke, and the market was getting whacked from all the
subprime news. The next morning Bernanke instituted a surprise interest rate
cut, and the market took off on a rally to the 1576 cycle high. I guess it was
just another one of those coincidences, with a little help from the PPT (Plunge
Protection Team).
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.
Have a good trading day and Happy New Year,
Kevin Haggerty
