The trading edge in this market

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?
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The hype of earnings season
is over and the SPX is locked in a trading range
and has only closed
above 1312 once, which was on Tuesday of this week. The daily range for the past
4 days is only 1% and that should be resolved next week. The short-term
internals remain neutral, with the 4-day moving averages of the volume ratio 53
and breadth +291, despite the 1312.25 close yesterday. Oil prices ticked below
$70 yesterday, with the CLM6 closing at 69.94, which is a key support level
dating back to 8/30/05. The 50-day EMA is 69 and 200-day EMA 63.83. Last week,
oil was going to $100 and this week some of the same empty suits are saying that
it has peaked. I guess that is what makes markets.

At 8:30 AM we have the government’s fraudulent job
numbers, so the futures gang and hedge funds will have something to play with
this morning. The only question is, which is more bogus: the jobs report or the
government’s current CPI calculations, which they say is now about +2.3%. Excuse
me, oil and food is left out and they are +80% – 90% for oil and +10% for food.
Housing is up double figures, as is insurance, not to mention double digit
increases in healthcare and property taxes. Net net, the real-world
inflation rate is probably between +10-15%, so maybe it should be no surprise
that the U.S. dollar is selling off despite rising interest rates.

The SPX advance is with far fewer stocks in addition
to negative divergences in some key indicators, so they need to spin hard to
keep the rally going, especially if they don’t have the energy stocks to carry
the index should these stocks correct. Professionals who trade reversals on
extended intraday volatility continue to excel, while the swing traders keep
trying to avoid the daily land mines which are much more frequent now on any bit
of news or brokerage hype, not to mention the hedge fund gaming of these
situations. It is better in this environment for position traders to emphasize
ETFs, HOLDRs and index proxies. Daytading the intraday volatility on the
commodity-related stocks is currently the best game and edge in the casino.

Have a good trading day,

Kevin Haggerty