This is a Must Read for Traders
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.
The $SPX rallied to 1328.75 on the 10:50AM bar from the previous 1314.29 close, and then drifted down until the Fed’s much expected no cut verdict. That didn’t prevent the empty suits on CNBC to hype it in every what if direction. The $SPX made three moves on the news, which is common. It jumped to 1332.02, down to 1323.38, then up too 1335.63 on the 3:05PM bar, and then it was down into the 1321.97 close to finish at +0.6%.
The QQQQ was +1.6% to 47.57, led by the semis (SMH +1.5%), but then declined -1.1% in the after hours trading by 6:00PM after the Research in Motion
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RIMM |
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PowerRating) and Oracle Corporation
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ORCL |
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PowerRating) earnings/outlook news. RIMM was -8.0% at 6:00PM, and ORCL -3.1%, in addition to Microsoft
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PowerRating) at -0.7%, and that set the tone for this morning. The $SPX futures are -12.5 points as I do this at 8:15AM, so it is going to be a 1st Hour Reversal Strategy morning, just as it was for the $SPX on Tues when it hit 1304.42 on the 10:00AM bar setting up the Trap Door contra move, which was obviously very profitable for daytraders familiar with my reversal strategies and Volatility Band symmetry.
I included the $SPX 5-min chart from Tuesday which outlines the defined reversal strategies. The first entry opportunity was the Trap Door above 1306.53 on the 10:05AM bar, which had symmetry with the -1.0 VB 1303.37. The “123 Higher Bottom” reversal entry was above 1307.65, which ran to 1326.02 before fading to a 1314.29 close. In the Trading Service you learn how to trade without emotion and take the highest probability trade setups utilizing the different strategies.
There was nothing compelling to do yesterday in the major indexes because of the early advance, and then a drift into the 2:15PM FOMC news. However, that was not the case for the energy sector which traded sharply to the downside on the opening, and then accelerated to lower lows on the 10:30AM Energy Dept. report on reduced supplies etc. The XLE reversed right on the -1.0 VB 85.07, and the first valid entry was above 85.30 If you didn’t take that one, there was the “123 Higher Bottom” reversal strategy entry above 85.39, which ran to 87.82. The reversal strategies (Trap Door, 123s, RSTs) will usually catch all of the extended over reactions, and they enable you to trade the market in either direction with confidence, and very positive results.
As I complete this at 8:45AM EST the $SPX futures are now -14.75 points, and the initial $SPX extended Volatility Band in play is 1308, followed by 1304, 1301, and 1294. The next key price symmetry after 1311-1310 is 1294-1292.
The next commentary is Tues 7/1/08
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Have a good trading day!