Two Trading Strategies for Today
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
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The major indexes were red on Friday, with the
SPX closing at 1422.75 and -0.4% on the week. The other indexes were also
down on the week, with the $INDU -0.6% to 12487, QQQQ -1.4% to 43.57 and $COMPX
-0.8% to 2435. Last week’s SPX low was 1416.96, and that is where
daytraders start the focus today. If that low gets taken out on
continuation weakness, then it will set up the RST reversal strategy, and if it
doesn’t, the 1-2-3 higher bottom will be in play, as the trendline from 1440.69-
1416.96 has been broken. The -1.0 VB level today for the SPX is 1414.61,
-1.28 VB 1412.49, -1.5 VB 1410.82, and -2.0 VB 1407.03. The 50 dema is
1409.77, with minor support at 1404. On the upside, the 20 dema is
1423.53. Once you have anticipated key levels and potential strategy
setups, you are ready to sit back and take whatever the SPX gives you within
that anticipated framework. The S&P futures at 7:15 AM as I do this are
quiet at -1.0.
The primary daily chart trend remains up, so the
bias is for the generals to mark-up their major holdings, or prevent any decline
in these last 3 days of the month, and then maybe put some new money to work the
first few days of February. With so many new ETFs now in the market, it
has definitely been a factor in prolonging the current bull cycle, as they
continually buy the same big-cap stocks for the trusts, and this is also a
factor in month-end. I don’t know how to evaluate this effect yet, but I
do know it is a new significant factor for random price movement, along with the
programs.
This week is full of economic reports following
the consumer confidence number today, so the artificial futures “games” played
with these reports will give daytraders the necessary volatility to get
involved. In fact, volatility expanded last week, with the SPX weekly
range at 23.7 points, versus 11 the previous week. The average daily range
expanded to 12.3 points versus just 6.8 for the week ending 01/19/07. (see
01/24/07 commentary) Contracting and expanding volatility is a very
important tenet in the “Core Framework” for my strategies in all time periods.
I expect the SPX to close Friday higher than last
week.
Have a good trading day,
Kevin Haggerty
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.