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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.
The major indexes spiked +26 points in the last half hour of trading Friday on the Ambac/MBIA ratings news, and you can bet that the Fed and Treasury head H.Paulson were the force behind the decision which will postpone near term pain, as they give the agencies time to raise capital. The gains were extended yesterday as the $SPX finished at 1371.80 (+1.4%) on moderate NYSE volume of 1.51 bill shs with the Volume Ratio 82 and breadth +1577 The surging energy and commodity related stocks were the leaders with the XLE +2.9%, OIH +2.1% and XLB +2.3% There was no rush to buy the banks as the $BKX finished at +0.8%.
In the previous commentary I said that the $SPX contracted volatility pattern would be resolved this week because it is month end, and there is time symmetry in play from the 10/11/07-12/11/07 1576-1524 highs, and the 11/26/07-1/23/08 1406-1270 lows The bond insurer ratings news of course accelerated the resolution. I also said we needed new levels for the next higher probability position trading opportunity, and that would be the 1420-1445 zone, which includes the 377DEMA at 1420.38, 233DEMA 1439.27, and 200DEMA at 1440.25 in addition to key angle symmetry. The initial resistance is the 1387-1407 zone. Also, the volatility bands for today run from the +1.0 VB at 1387, to the +2.0VB at 1403, so that is additional symmetry for intraday short plays. The 1364-1371 zone has been a gold mine of index shorts for daytraders since 2/12/07 and that also includes two declines yesterday from 1362.91 to 1351.81, and then from 1370.05 to 1357.77 before “they” took it up in the last 30 min to the 1371.80 close.
The extended news reactions continue to make the reversal strategies the best major index/ETF risk/reward for daytraders, and our continued primary focus on energy and commodity related stocks the best source of individual stock daytrades on a consistant basis. The daytrading strategies that dominate in this increased volatility are Trap Doors, RST`s, 123`s, and of course the daily volatility band opportunities.
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.
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