The Game is On

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 9/17/10

Since the last Commentary for 9/13, the SPX has traded in just a 1.1% trading range this week, which you see on the enclosed chart. The SPX is +8.4% in 13 days so far for this rally off the 8/27-8/30 key time zone, and S/T-O/S condition after the -7.9% decline from 1129.34 to 1039.70. They were minor tops and bottoms. The market has worked off the S/T-O/B condition by trading sideways for the last week.

The QQQ is +4.8% in seven straight up days as the “herd” chases the Tech stocks front running the different tech conferences coming up and will probably sell them after, just like the earnings game. The SPX has bumped up against the 6/21 1131.24 and 8/9 1129.24 highs for the last four days, and they will get taken out today on the Triple Witch expiration [Quadruple means nothing] or early next week.

In the last commentary I said that the key catalyst for this market to sustain this current rally for a bit longer is if the perception continues to grow that the Socialists will lose the House in November, and that the Republicans will also win enough seats in the Senate to cause gridlock, and hopefully repeal some of the draconian new business regulations that keep growing with the fine print, that hardly anyone reads when these bills are passed.

The current rally is being led by a small universe of big cap stocks, and the entire rally has been on very light volume, and mostly accelerated by gap up NYSE openings accelerated in Europe and the ill-liquid globex futures.

After the range B/O, the obvious resistance levels in play are 1040, which is the .618RT to 1219.80 from 1010.91, and 1150.45 which is the 1/19/10 high. The market has ignored the continuing negative economic news that we have seen for the last few weeks so the mid-term rhetoric about the takeover in the House, and the Socialist’s potential cave in on taxes is taking precedence as a market mover. This is the only thing that will possibly prevent the 1010.91 low from getting taken out in the Sept/Oct period

Wilber Ross said it very clearly the other day to the empty suits on CNBC when he said that the so called “rich” are mostly small businesses that do most of the hiring and account for 40% of consumer spending, and consumer spending is 70% of our GDP.

SPX Chart

Have a good trading day!

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