Traders Strategy and Price Symmetry
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 early SPX rally yesterday was derailed at 1452.64 on the 11:05 AM bar,
versus the previous 1423.29 close, and then the major indexes went trend down
until the SPX reached the 1425-1420 key price zone. The first bounce from that
zone ran +10 points to 1434.85, and then reversed to the bottom zone low at
1419.29 on the 2:30 PM bar. This set up the SPY RST long strategy. The
equivalent SPX entry was above 1423.49, which traded up to 1446.08 before fading
to close at 1439.70. The key price zone generated two good trades yesterday,
especially the RST, which ran +23 SPX points. Traders used either the futures or
the SPY. It was a spike up starting on the 3:25 AM bar, so maybe it was some of
that PPT "magic dust."
NYSE volume expanded to 1.86 billion shares, the most since 11/8, and the
internals were neutral with the volume ratio 49 and breadth -36. The SPX went
out at 1439.70 +0.5%, with the $INDU +0.4% to 13010, and QQQQ +0.4% to 49.90. In
the sectors, it was all energy, gold and commodity stocks, as the $HUI was
+5.3%, OIH +3.3%, XLE +3.2% and XLB +1.5%. The banks and brokers were both
negative, with the $XBD -0.8% and $BKX -0.4%, as was the SMH -0.5% (semis). On
Monday, the $TRAN and IWM took out their 8/16 lows, and yesterday the $XBD, IYR
and IJR (S&P 600 small cap) did the same. The $BKX, XHB (home builders) and RTH
are also trading well below those lows, especially the $BKX and XHB. This is why
any mark up rally into year end is a rally in a bear market, and also why I said
it would be another, and probably the last good short opportunity before 1370.60
gets taken out with the initial key bear market price objective at 1275-1260.
This zone includes 1268, which is the .382 retracement to SPX 768.63 (10/2 low),
and also includes the 360 degree angle from 1576.09 at 1274. That would be a
-20% decline from 1576. However, there are also other key price levels for
short-term traders below the current 1425-1420 zone, and I will outline them to
the Trading Service for the next commentary for Friday/Monday, which you can see
with a free trial to the service. The SPX futures are -17 points at 7:30 AM as I
complete this, so we will catch a good upside bounce again today, and most
likely in the first hour, if the futures maintain their current discount. Bad is
good when you learn to trade the extended volatility strategies.
For those of you who have either my Sequence Trading or Trading with the
Generals modules, you know that the SPX will set up in another RST if
yesterday’s 1419.28 low gets taken out. The .706 retracement to 1470.60 is
1414.57, with SPX Volatility Band levels in play today below the 1425-1420 zone
at 1417, 1413 and 1404.
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 Happy Thanksgiving,
Kevin Haggerty