Trade only extended reactions on this expiration Friday
Kevin Haggerty is
the former head of trading for Fidelity Capital Markets. His column is
intended for more advanced traders. Kevin has trained thousands of traders
over the past decade. If you would like to be trained by him,
ext. 1
NYSE volume yesterday was 1.55 billion shares,
which is the most since the last trading day of August at 1.78 billion shares
and the first day of September with 1.7 billion shares, both of which were the
Generals involved in major programs. It was a neutral day yesterday, which is
not unusual into expiration. The volume ratio was 41 and breath -141 for a 4 MA
of -608, while the 4 MA of the volume ratio was 41. The major indices all
finished almost unchanged with the SPX
(
SPX |
Quote |
Chart |
News |
PowerRating) at 1227.73 vs. a 1227.16 close
on Wednesday. Gold had another leading day with the XAU +1.7%, and the only
other green sector was energy, with the
(
OIH |
Quote |
Chart |
News |
PowerRating) +0.5%. The $CYC was -1.0% and
the
(
TLT |
Quote |
Chart |
News |
PowerRating) -0.8%.
The major index market action was not what you’d
call “trader friendly,” as the SPX daily range was just 7 points. The
(
SPY |
Quote |
Chart |
News |
PowerRating)
gapped up on the opening from Wednesday’s 123.21 close to 123.49, and the
intraday high was 123.65 on the 9:40 a.m. ET bar. It traded down to 122.90
(intraday low) where the first defined opportunity was evident. The RST long
entry was above 123.04, and it traded to 123.35, but after that, it didn’t see
that price again and was choppy into the 123.15 close. Entry was on the 12:15
p.m. bar, but it is understandable if you passed on the trade because the market
action at the time told you nothing, in addition to being what is normally a
weak time to take any trade other than exits from early morning setups. There
were quite a few programs yesterday, and you expected that possibility starting
the day, and there will be more on Friday. The SPY went out at 123.15 vs. its
20-day EMA at 123.06, and the SPX 20-day EMA is now 1226.92. This is the 21st
week since the 04/20 113.55 low and SPX 1136.15 low, in addition to Friday being
the fifth day down from the 124.74 09/09/05 high, which is a double-top number
to the 08/03/05 124.74 high.
We have some symmetry into this Fibonacci time
zone, and the 124.74 double magnet that the Generals can shoot for into the
September quarter-end, which would give them some much needed paper mark-up. I
am confident there will be considerable volatility into the end of this third
quarter, and that means daytraders will have much to do, none of which has to do
with whether you like, or do not like, the market.
This is being done Thursday night for Friday.
Have a good trading day,
Kevin Haggerty