From 1990 to 1997, Kevin Haggerty served as Senior Vice President for Equity Trading at Fidelity Capital Markets, Boston, a division of Fidelity Investments. He was responsible for all U.S. institutional Listed,OTC and Option trading in addition to all major Exchange Floor Executions. Mr. Haggerty is a co-founder of Tradingmarkets.com and is the founder of www.KevinHaggerty.com.

In the previous commentary, which you should review in the archives, I outlined the symmetry in the key price zone which is 1396-1417. It contains the five long term EMA`s, in addition to the 1403 360 Degree angle measured from the 1257 low (3/18/08), in addition to the .50 retracement to the 1576 bull cycle high (10/11/07) from 1257, which is 1417. There is also some key time symmetry through next week, and this is the first pullback to the long term MA`s, so it is certainly not a buying opportunity, and the highest probability is for a reversal. Trading is a probability game, and whether you are a day trader, or swing trader, you should learn how to identify these high probability situations, and that is what we do in the Trading Service.

The political and useless estimated GDP number yesterday was +0.6, and as anticipated, was touted as "better than expected" by the media drones and Administration officials. In the previous commentary, I also said that "Two weeks ago President Bush said it is a slowdown not a recession, so I guess that means the GDP number on Wed won`t be a negative surprise" The most significant economic report yesterday, if we even care as traders, is that Houshold Spending, which is the biggest part of the economy, grew last quarter at the slowest rate since 2001 when the US was in recession, job losses accelerated, food and fuel prices surged, and housing values declined before the final bubble top into 2005-early 2006. The election is six months away so you don`t really think there will be a declaration of recession as defined by the governments current GDP criteria. But as traders we could care less, because it is the reactions to all of the current economic and derivative meltdown news that we trade against on a daily basis.

The FOMC announced the expected .25 point rate reduction yesterday and the $SPX made its intraday 1404.57 current rally high on the 2:20PM bar, before heading south to a 1384.59 intraday low (accelerated by sell programs) and 1385.57 close (-0.4%) The $INDU was almost unchanged at 12820 versus the previous 12832 close. NYSE volume was 1.43 bill shs and the internals neutral with the Volume Ratio at 48 and breadth +225 With the rate cut, the sector leadership was the commodity sectors led by the $HUI at +3.2%, and OIH (+1.0%) If the $US dollar can stage a rally the odds are that it will be short lived, and there will continue to be upward pressure on commodities under the current recession/inflation scenario as the Fed continues to inflate its way out of this current crisis.

The edge is definitely to the short side into the $SPX 1396-1417 key price zone, and there is also key time symmetry through next week. The $SPX did hit 1404.57 yesterday, but closed below the zone at 1385.59, and reversed the two previous lows and four closes. The energy sector continues to be the most productive for day traders as it is a rare day that you don`t get two significant intraday swings to trade. The only question is whether the PPT (plunge protection team) can hold this market up into the election without another significant downside move, and the odds don't favor that outcome.

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.