Market S/T/O/B at Resistance 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 12/7/11
The SPX advanced +9.3% in 6 days from the 1158.66 low [11/28/11] to the 1266.73 high at 1266.73 on Mon and closed yesterday at 1258.47 The reversal was from a key price zone as 1158 is the .618RT to 1074.77 from the 1292.66 10/27/1 high, and the market was S/T-O/S.
Euro-Zone rumors were the headline news catalyst last week and now market players will do nothing as they wait for the EU Summit this Fri, or else front run any leaks, which is the usual case coming from Europe as there is little if any regulation to control it, so you know somebody is making a ton of dough in that game.
The SPX has advanced again to the resistance zone, which consists of the 200DSMA at 1264, the H&S neckline which runs through 1275, in addition to some square root symmetry at 1271.54 and 1271.45 which is the square root multiple [32.78] of the 1074.77 low. The 4 Day MA`s of the volume ratio and breadth ratio were S/T-O/B after the Mon 1266.73 high at 70 and 67.
The high probability reversal position trade was from the 1158 .618RT zone, and that has been exited after the +9.3% advance to the resistance zone in 6 days. If you are betting on the market before hand to trade through the resistance zone based on the EU summit, or after some rigged jobs numbers, it is a speculation trade, but not a high probability trade with symmetry if you are managing your own trading business.
I would expect Geithner/Obama to hype the EU Summit meeting unless it implodes. Geithner gave us a good but nervous laugh when he said that the IMF would play a big role, because the IMF policy consists of the very same solutions that created the great depression, and the current administration is heading down the very same road.
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