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 9/13/10
The anticipated S/T-O/S bounce from the key 8/27-8/30 time period is now +6.8% [low-high] in nine days from the 8/27 1039.70 low. The volume has been extremely low on the rally and the liquidity thin because of the Labor Day holiday and the Jewish holidays last week. The SPX spiked +5.2% into the Labor Day weekend in 3 days, with the hype being the bogus initial claims and jobs report, but like “magic” it just so happened to precede Obama’s speech on last Friday after the jobs report.
The SPX has advanced +6.8% from 1039.70 to an 1110.88 intraday new rally high on Friday and closed at 1109.55, or +0.4% on the week. The SPX was +0.5% Friday on the lowest NYSE volume of the year at 756mm shs, but that is not a surprise because of the holidays
Nobody except the liberal media believes the jobs numbers put out by the BLS anymore, because they were overstated once again by the Birth/Death rates adjustment for the previous month by 115,000 estimated jobs versus 6,000 in July. In all of 2009 the revised number was an overstatement of about 1,000,00 jobs, and based on the numbers they have put out this year so far there will be another big negative revision for 2010. However, it will not be revised until Feb 2011, and after the mid-term elections.
The biggest farce about the initial claims report that was supposedly “better than expected” is that nine states didn’t even file claims data to the Labor Dept because of the holiday weekend. CA. and Virginia filed their own, and the Government estimated the other seven, so it was surprise that the data was reported “better than expected” because the numbers were made up on a fly. You sure as hell didn’t hear any of this from the empty suites on CNBC as they only hyped the artificial number and never explained the real facts behind the numbers.
The key catalyst for this market to sustain a continuation upside move, and avoid taking out the SPX 1010.91 7/2 low in the Sept/Oct period, is if the perception continues to grow that the Democrats will lose the House in the mid-term elections, and that the Republicans will also win enough seats in the Senate to cause gridlock. If that doesn’t happen then this market will head south again.
Have a good trading day!
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