What 8 Days of Decline Does to 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?
Click here for a free one-week trial to Kevin Haggerty’s Professional
Trading Service or call 888-484-8220 ext. 1.Â
The SPX closed at
1261.81, -0.7%, as did the $INDU, 11,128, $COMPX, 2,180 and
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39.05. The straight line decline is now eight days and -4.9% for the SPX.Â
1266 – 1260 is a primary price zone and it is redundant to say this is a
short-term oversold condition. The 5 RSI is 11.2 and the 14 RS, 29.1, which is
the first time the 14 RSI has been less than 30 since the 10/13/05 low. 1262.81
is the 200-day EMA and short-term long positions were initiated into the
futures-induced 6.5-point decline in the last 35 minutes yesterday. In fact,
since Tuesday’s close (1292.08) to the 1261.81 low yesterday, about 26.5 points
out of the total 30.3-point decline occurred in about 90 minutes, all
accelerated by sharp futures selling–and it didn’t take much in this nervous
market. On Wednesday, it was 9:30 – 9:40 AM, 11:00 – 11:25 AM, 2:35 – 2:
50 PM and yesterday it was 3:20 – 4:00 PM.
NYSE volume was 1.83 billion shares, volume ratio
29 and breadth -764. The breadth was partially influenced by the +1.4% advance
of the
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Wednesday, the reverse was true, as breadth was -2151 as rates had a sharp
increase. The commodity-related stocks have had sharp declines, coming off
almost vertical advances since early March, as have the brokers, with the XBD,
-12.4% since the 4/21 high. The
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high. There were other negative divergences as the Nasdaq made an 4/20 high and
the QQQQ and SMH made their bull cycle highs on 1/11/06. Technology is nowhere,
as the
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PowerRating) and $COMPX are all trading below their 200-day EMA.
Those of you that have joined me in protecting
long-term index proxy positions and/or reducing equity equity allocation into
the Wave 5 key price and time zone have slept well the last few days. Those of
you with options experience that put on the suggested long synthetic delta
neutral straddles are also very happy.
Have a good trading day,
Kevin Haggerty