SPX in Position for More Upside
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.
The SPX had the anticipated weakness following the “triple witch” expiration and finished at 871.63 or -1.8, while the INDU was -0.7, and QQQQ at -2.2. NYSE volume was light at 1.2 bill shs, with the volume ratio at 22 and breadth at -1179. All of the major sectors finished red, led by the financial and energy sectors. Crude Oil finished below $40, and the $USD index went out flat. If there is more weakness today, expect the SPX to trade higher on Wednesday (NYSE 1:00PM close) on reduced volume and liquidity, and again on Friday.
For the last 3 weeks the SPX has traded in a 7.3% range between 918.75 and 851.35, which is a narrow range relative to what we have seen over the last 3 months. The SPX weekly chart points to higher prices into year end with the positive divergence at the MACD Histogram and subsequent crossing of the zero line. However, price is a reality and there is no continuation of trend until the 918.85 high gets taken out.
The SPX went trend down yesterday and gave day traders some defined short entries below all of the EMA’s (5 min chart) starting with a 7 bar closing range B/O below 883.02, as the SPX traded down to the 857.09 intraday low, where it bounced of last weeks low in the last 30 minutes to close at 871.63.
There will be many different program agendas into year end, so day traders must expect some erratic trading, especially in the individual stocks, so it is best to favor the major indexes and ETFs, and narrow your trade selection to the obvious strategy setups. These strategies can be seen by taking a free trial to the Trading Service.
I wish everyone a Merry Christmas and Happy Holiday!
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