The Euro and US Ponzi Schemes are Great for Day Trading
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 7/15/11
The SPX advanced +7.8% low to high from the 6/13 key price and time zone at the long term MA`s, while the QQQ was +11% from 53.50 to 59.36 on 7/7. In the previous commentary for 7/6 I said that you can`t know the duration or extent of a move, but that the odds favor the SPX taking out the 1370.58 magnet cycle high [5/2/11] after a pullback, because the vertical advance was so S/T-O/B. The TRAN index had already taken out its 5/2/11 high.
The SPX made the current rally high the next day on 7/7 at 1356.48 and has now pulled back -3.7% [50 points]. The Euro zone Greece debt saga spread to Italy, there was more debt noise in Ireland, and inevitably it will be Portugal and then probably Spain. The markets were obviously shaken, and the failure of Washinton to agree on how to proceed with the “Greatest Ponzi Scheme” of all time has the politicians virtualy lying to the country about the immediate dire consquences, and the sorry thing is most people don`t have clue about reality.
Failure to raise the debt ceiling will not lead to immediate default, nor the failure to pay Soc Security, Medicare, Medicade, Military etc, because that is all covered by existing reveunes coming into the Ponzi pool. It would force the Govt to immediately cut back other agency and discretionary spending, and that would be a good thing until a real deal is reached.
The economy is facing another possible recession as defined by GDP < 2.0%, which has never failed to produce a recession, the housing market continues to decline, there is no real job growth, and yet the Administration wants to raise taxes and refusues to stop choking business with all their new regulations etc It is no wonder that all of Obama`s original economic team has bailed out on him, because the ship is sinking and they didn`t want to be part of it.
The market has been in a knee jerk mode since that 1356.48 high, especially with all the rumors about another QE program or not. This has been great for our day trading, espeially in crude oil, gold and precious metals. I have included the last 3 days of the USO contracted volatilty defined setups which highlights the emotion and forced manipulation to the headline news.
The high close of the price zone at the long term MA`s is 1296.6, and low close was 1265.42 [1298.61-1258.07], but there is a lot of air below that so that zone must hold or there will be a significant decline.
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