The Market and Geometric Symmetry
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 1/30/11
The SPX advanced +10.9% from the 12/20/12 1202.27 low, which was the start of the year end rally to the 1333.47 high on 1/26/11, and into the anticipated time zone, The market was significantly S/T-O/B with the 5 RSI at 88.25, which is the highest since the Nov 2010 94.21 high after the initial 2010 QE rally following Bernanke`s Jackson Hole Wyoming statement.
It was a low volume vertical advance, and also helped by the trust buying of the stocks for their ETF`s because of the significant increase in investor sentiment. The Fed surprised last week with the statement that it would keep interest rates near zero through 2014 and the SPX went vertical Wed to close at 1326.06, up from the 1306.06 weekly low the previous day. However, the SPX went -0.6 and -0.2 the next two days and closed the week at 1316.33, which was essentially flat at +.07 for the week.
The anticipated trading service time symmetry was 1/28/11 [+/- 3days], which is 1570 CD from the 10/11/07 1576 top, and 1570 is .50 x Pi which is 3141 [3.14 x 1000]. Fri [2/3] is 1576 CD from the 10/11/07 1576 bull market top, so price equals time at 1576. There are 52 days from the 10/4/11 1074.77 low to the 11/25/11 1158.66 low, and 1.272 x 52 = 66, or 1/30/11, so that coincides with the other time symmetry. With the market so O/B, and in a key time zone, the odds are always in favor of a pullback/correction in these situations.
The SPX is above all of its rising EMAs 20, 50, and 200DEMA`s but a pullback should find some support at the 1296 level and then the 1270 zone all of which would be a positive if the market is going to sustain the advance from the 10/4/11 1074.77 low and challenge or take out the 1370.58 5/2/11 high which was a +105% advance from the 667 low. The previous bull market from 10/01/02 [769] to 10/11/07 [1576] was also +105%, but obviously in a longer time period.
It is an election year, so obviously the media news and economic reports from the BLS will be definitely tilted in Obama`s favor, and seeing that Obama reappointed Bernanke, he will do what he can to help him [QE].
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