The Next Position Trading Edge
Kevin Haggerty is a
full-time professional trader who was head of trading for Fidelity Capital
Markets for seven years. Would you like Kevin to alert you of opportunities in
stocks, the SPYs, QQQQs (and more) for the next day’s trading?
Click here for a free one-week trial to Kevin Haggerty’s Professional
Trading Service or call 888-484-8220 ext. 1.
The SPX initial bear market rally from the 1/23 1270 low in 8 days to 1396
(+9.9%) has been stalled between those levels for the past 8 days, after having
declined to the 1316.75 low on 2/7, versus the 1318 .618 RT to 1270. This is a
neutral price zone, with the SPX 1348.86 close yesterday, which can only be
resolved with a Wave 5 down below 1270, or a 1-2-3 Higher Bottom trend
continuation above 1396 to the 1420-1450 key resistance zone, which includes the
declining 233-day ema (1444) and 200-day ema (1446), in addition to the downward
trendline from the 1576 10/11/07 bull market top. The .50 retracement to 1576 to
1270 is 1423, so it is a significant price zone. The rally off the 2/7 1316.75
low has been led mostly by the energy sector on the crude oil advance for this
period.
The USO bounced off the bottom of its 4-month trading range, and is +10.6% in
5 days, off the 68.57 low. Each time Crude hit the low end of the range, Chavez
rattles the sword, and crude advances. He must be making a ton on long crude oil
calls before he sounds off each time. The XLE is +10.8% for the same period, and
the OIH +12.6%. Trading service members capitalized on the USO range trade, and
there have been consistent daytrader opportunities in the energy
individual stocks and ETFs.
Daytraders have also capitalized on the short side for the past 3 days, as
the SPX traded up to that 1364.-1371 initial resistance zone, accelerated by the
hyped reactions to news, which of course faded quickly, especially after the gap
up openings on Tuesday and Wednesday. Key strategies like the Trap Door, RST and
1-2-3 all came into play, and there was also Volatility Band symmetry at the
extended levels, so it has been a good run for daytraders. The strategies are
all outlined in the trading modules, and can also be seen with a 1-week free
trial to the Trading Service.
The market is not short-term oversold or overbought, is not extended to any
long-term Standard Deviation levels, and is not at a key price zone, so there is
no edge for position traders right here, until we see at least 1 of those
conditions. I still think the 1270 low will get taken out in this bear cycle,
even if the SPX rallies to the 1420-1450 zone first, and if it does, it will be
a high probability short opportunity with a low common denominator entry.
Check out Kevin’s strategies and more in
the
1st Hour Reversals Module,
Sequence Trading Module,
Trading With The Generals 2004 and the
1-2-3 Trading Module.
Have a good trading day,
Kevin Haggerty
