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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. For a free trial to Kevin’s Daily Trading Report, please click here.
The market has obviously taken another turn to the downside on the Paulson $700 bill flip flop, in addition to Congress trying to politically earmark much of that $700 bill bailout fund which includes the big three auto boondagle.
The SPX made a new bear market intraday low last week at 819, and a new low weekly close at 873.29 The INDU has yet to take out the 10/10/08 cycle low of 7882 , but that is not the case for the NYA, IWM, MDY, QQQQ, and COMPX. There is testimony again today from Bernanke and Paulson, and that has not gone well lately, relative to immediate upside market direction. Many of the drones in Congress will be all over them, especially Paulson who is a lame duck.
The SPX finished -2.6% to 850.75 on Monday as did the INDU with 8274, but day traders profited on the long side by playing the 1st Hour Reversal Strategies, and did the same in the energy sector. I have included the DIA trade example for those of you familiar with the strategies.
The initial decline to 82.72 had symmetry with the 82.68 .707RT to the 79.86 low last Thursday, so some traders took the signal bar entry above 83.12, and others might have taken the 123 Close strategy entry above 83.18 The trade ran to a 85.95 high before the afternoon reversal, so traders profits varied depending on how they managed the trade. There were similar setups in the energy ETFs and stocks.
Crude oil ($WTIC) hit a 55.27 low on Monday, closed at 55.60, and remains in a key price zone relative to the 147.90 bull market high, so energy stocks must remain a key focus for day traders, in addition to the major indexes and ETFs. I think that the energy sector will surprise to the upside when the market makes the next significant reversal which will be to the upside.
Very few individual investors make timely changes to their equity allocations and my thoughts on that are outlined in my 11/11/08 commentary titled "The Next Significant Swing in a Secular Bear Market" which you can access by clicking the link above.
Have a good trading day!
Click here to find full details on Kevin's courses including Trading with the Generals with over 20 hours of professional market strategies. And for a free trial to Kevin’s daily trading service, click here.
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The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
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