SPX Trading Like It’s Rigged

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 8/07/12

The SPX was down 4 straight days coming into last Friday with the 4 MA of the VR S/T-O/S at 22, and it was trading day 43 [5 x 8.6] from the 10/4/12 1266.74 low in the key price and Pi time zone, in addition to the intermediate O/S condition and 377DEMA symmetry.

Geometric symmetry is the most significant constant in the market, but you have to know how to use the combination of primary tools.

It was a “risk on” day Friday at +1.9%, which enabled the index to finish positive for the week at +0.4%. The same thing happened the previous week on Thursday and Friday when the SPX was +1.7% and 1.9% [Draghi], so the index finished +1.7% on the week to 1385.97.

All three of those “risk on” days were extended to the +2.0 VB zone, and then yesterday the SPX traded up to 1399.05 on the 9:50AM bar, and then went horizontal in a miniscule range of 2.75 points until the closing bar when it closed the session at 1394.23. The intraday high was 1399.63 versus the +1401.26 +1.0 VB, in addition to the down trend line from 1422.38 at 1400, and also some geometric square root angle symmetry in that zone.

The “herd” is wishing, and most likely assuming that Bernanke will have another Jackson Hole QE surprise other than just continuing to buy bonds. They also are betting that the ECB will buy the debt of the PIIGS which would only be another short-term fix for the collapsed socialism. However, that hasn`t stopped the community activist elected to the US Presidency from doing the same thing by design.

It is not productive trading the indexes on days like yesterday, but Trading Service members will always find trades by scrolling the individual Focus Lists in the trading service. When you are trading, for example, the SPX cash index, it doesn’t matter whether you use the futures, ETFs, or any of any of the leveraged products, because they all key off the cash index.

The market continues to trade and climb the staircase of 5 higher highs and 4 lower lows since the 1266.74 price and Pi time low on 10/4/12. The SPX price advance is so symmetrical it is as if the PPT has a string on the market, regardless of the economic weakness, in addition to the poor current earnings season where top line revenue growth has declined, and the managed earnings game doesn`t mean a thing, but that was also relatively weak despite the significant drop in analysts’ estimates.

Congress is closing shop for 5 weeks if you can believe that, with the current US fiscal situation in shambles as to a solution of some sort. The election hype will increase, while the ECB headline news in Europe and the Bernanke Jackson Hole outcome this month are the primary market catalysts in the trading doldrums of summer.

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