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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.
NYSE volume declined to 1.59 billion shares on Friday, as there was no continuation off the 1235.18 Thursday low. The SPX closed at 1252.30, -0.4% and -2.8% on the week. The Dow was also -0.4% to 10,892 and -3.1% for the week. The sectors declined in-line with the SPX on Friday, except the XBD, which was +0.5%. The commodity sectors led the downside last week with double-digit losses in many of the energy, copper, steel and gold stocks. The SMH (semis) was -6.3% last week and has declined -16.5% high to low since the 5/8/06 38.48 high. It is trading about 10% below its 200-day EMA, based on Friday's 32.57 close. Even the CNBC empty suits cannot spin that. In the commodity sector, energy and gold will have another sharp upside reversal. There is crude oil ($WTIC) support at 69 and for $GOLD at 575 - 550 (continuous contract-EOD).
This week is triple witch expiration (forget about stock index futures) and all of the major indices have positive momentum divergences following Thursday's mini-meltdown, so there might be some upside bounce into expiration. However, the trading will be erratic, so daytraders must be nimble and expect shorter directional moves, as there is lots of random price movement outside of the normal Generals buying and selling. The SPX, Dow and IWM all closed just below their 200-233 day EMA zones, so any short-term come back by the bulls will occur from this zone.
Have a good trading day,
Kevin Haggerty
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