Strategy plus symmetry equals lower risk and higher rewards
The SPX closed at 1353.35 and has churned in the key price
range from 1349-1357 for five days. The daily SPX range yesterday was only
5.6 points, but the travel range was over 18 points, so it was a good day for
traders. We caught both an RST sell after the SPY 135.45 high and an RST
buy following the 134.84 low. The RST strategy is available in both the
Sequence Trading Module and
Trading With The Generals 2004. The same two RST setups were available
in the DIA and QQQQ, unless you prefer to trade the futures off of these setups,
which is fine.
Market action continues to indicate that the mid-term election
is a prop under the market. There have been some sharp +10-20% straight up
moves in many individual stocks, and this means the shorts are scrambling.
Any hint of a geopolitical crisis brings in the “mystery futures buyers” to get
the buy programs going. Intervention in the markets used to be very subtle
and infrequent since the 1987 crash, but now I’m sorry to say it looks to be
blatant.
NYSE volume was 1.5 billion shares, with the volume ratio 55
and breadth +325. The primary market action was the energy sector, as the
OIH finished +2.3% and the XLE +1.9%. There was a very profitable RST buy
setup for the OIH after the 121.79 low, which traded up to a 126.89 high before
closing at 125.97. The same is true for the XLE, following the 51.60 low,
which traded to 53 before closing at 52.87. Because of how the RST
strategy works, the action levels are easily anticipated in advance, so you are
ready to take trading action, subject to confirmation of market dynamics.
These same RST setups were available yesterday in many of the component stocks
that make up the OIH and XLE, so you had multiple trade selections.
Trading high probability situations with the symmetry of the various significant
tools found in the strategy modules continues to be very rewarding.
Have a good trading day,
Kevin Haggerty
