Program Magic Continues Into Year End
Kevin Haggerty is a full-time
professional trader who was head of trading for Fidelity Capital Markets for
seven years. Would you like Kevin to alert you of opportunities in stocks, the
SPYs, QQQQs (and more) for the next day’s trading?
Click here for a free one-week trial to Kevin Haggerty’s Professional
Trading Service or call 888-484-8220 ext. 1.
The gap down openings in the major indexes set up
the 1st hour reversal strategies, and daytraders using these strategies had a
big day. There was lots of symmetry and confluence with the Trap Door and
RST reversals. The 11/18/06 commentary said, “The Generals will not let much of the
year-to-date SPX gains slip away, and it only takes a few buy programs to push
the indexes higher.” Because most of the big mutual funds have become
quasi-index funds, the buy programs can keep the plane flying, but not for much
longer. Spike reversals up are most often followed by a similar move down.
The SPX intraday low of 1414.97 was made on the 9:40 AM bar followed by the Trap
Door entry, and the SPX traded up to an intraday high of 1428.30 before closing
at 1425.56. There were similar setups for the DIA and QQQQ, which were
also RST strategies in addition to the IWM. The best sector play was the
Trap Door VB reversals in the OIH and XLE, in addition to their component
stocks. These levels were anticipated in advance in the trading service,
as were the major indexes.
NYSE volume was 1.56 billion shares, and the 1:40
PM-4 PM buy program rally got the internals back to neutral with the volume
ratio 55 and breadth +281. Only the $HUI +3.2%, XLE +1.7%, OIH +1.6%, and
PPH +0.5% outperformed the SPX and $INDU, which were both +0.2% because of the
afternoon buy programs. The QQQQ and $COMPX were both -0.3%. The
semis led the downside with the SMH -1.5%. Intermediate-term breadth,
money-flow and momentum divergences continue as “they” take the SPX/$INDU
higher.
The generals have good year-to-date performance
numbers, and you can expect them to protect and enhance that in the last 7
trading days of 2006. Traders’ concentration should remain on the
general’s major holdings/2006 winners, because the year-end “magic” gains will
continue followed by the first few days of January. After that, it becomes
jump-ball in Q1 2007.
Have a good trading day,
Kevin Haggerty
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.
