Recognize Key Reversal Zones and Cycle Timing Symmetry
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 12/05/12
The SPX finished the Holiday week at +3.6% to 1409.15, +0.5% last week to 1416.25, and is +0.7% this week closing yesterday at 1407.05. The intraday volatility is focused on the never ending and useless hype about the “FC’, but that has provided multiple day trading opportunities while the political lies from both sides go round and round.
The post election decline was -6.0% from the 1428.39 11/6/12 close, to the 1343.35 low on 11/16/12 at the 1346.11 .618RT to the 1266.74 [6/4/12] low, from the 1474.51 bull cycle high.
The market was significantly O/S at the .618 symmetry, so the probability of a reversal was high, and that is what happened as the SPX has advanced +6.0% in 11 days from 1343.35 to the 1423.73 intraday high on Monday. The SPX is S/T-O/B, with a negative 5 RSI divergence, and key price resistance at 1425, in addition to the .618RT to the 1474.51 high from 1343.35 at 1424.41.
The probability of a reversal from this symmetry is high, and it should retest the 1343.35 low to at least the 1378.96 200DEMA and 1374.06 .618RT to 1343.35.
When a key symmetry zone is hit and the market is either O/B or O/S it obviously creates many High Probability-Low Stress Day Trading opportunities, as well as short term position trades.
I included the 5 minute chart from Monday when the SPX made the opening bar 1423.73 high versus the symmetry outlined above, and the subsequent profitable day trading short entry as the index went trend down to the 1409.46 close.
The reactions have been immediate in both directions relative to the fiscal cliff hype depending on who makes the statement. One example of that was last Wednesday when it was a FC combined [progress being made] statement that said absolutely nothing in reality.
However, the SPX had declined to a 1385.43 low on the 10:05AM bar, which is usually a key first hour reversal period. It had declined to the -1.28 VB, and there was also a Doji star reversal pattern with a positive 5 RSI divergence, so the symmetry was good to take the trade regardless of any news.
There is some significant Pi cycle timing symmetry in mid June 2013, and also the 1st week in August, so that will be a crucial timing period for the market, and we will be right on top of that in my Trading Service at Trading Markets. Those of you that have the “Manual” are already zoned in on that period. Anticipate the bear market decline in 2013.
You can take a free one week trial to the Trading Service at TradingMarkets.com.
You can download for free 6 of my calculators that I use to measure price and time symmetry at www.geometricmarkets.com, and my new 200+ page manual “Markets Trade With Geometric Symmetry” is also available for purchase on the site. It doesn`t matter whether you are a trader, investor, portfolio manager, or analyst, because this product will enable you to pinpoint high probability reversal or acceleration zones in any market, including Stocks, Bonds, Commodities, and Currencies.
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