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4-Day SPX Trading Bonanza
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 anticipated SPX short-term reversal is now -3.2% from the 1101 high to yesterday's 1065.23 low, but as I said in previous commentaries, the Generals were expected to keep any pullback from accelerating in front of month end, which is this Friday, and would most likely initiate a mark up bounce the last 3 days of the month in the absence of overt news.
The SPX closed yesterday at 1065.95 (-1.2%) on NYSE volume of 1.39 bill shs, with a volume ratio of just 12, and breadth -1609. It was a replay of last Friday when the SPX was also -1.2%, with the VR 24 and breadth -1557. The USD made a 9-day high and close yesterday to 76 (+0.7), and with the "world" short the dollar, any short covering rally would obviously put pressure on the equity market and the commodity sectors. The "crowd" is expecting the seasonal upside bias, and it will most likely get it, but it will be on the "market's schedule, and not the "crowd's". I think the surprise will be continued weakness into mid to late November, and then a rally into year end.
The SPX intraday travel range for the last 4 days has been excellent, and daytraders utilizing my extended volatility strategies have made significant gains. There were +72 points of possible gains from the strategy entry levels so it was hard not to win big. All of the strategy setups were at extended volatility band levels (trading service), and 4 of them were RST's, which means all of the trades had positive mathematical expectations, which my strategies are all about.
The spin from the Government and media about the "recession is over", and hype about the "better than expected" earnings, which is a game that companies play with Wall Street analysts, is built on sand. When you hear that the earnings from 80% of reporting companies are coming in "better than expected", yet 60-65% of them report declining revenue and lower income, you know it is a crock of ----. Most are worried about inflation right now, but unfortunately for us, it looks like the surprise will be more deflation, and that "ain't good folks in the face of the on going "derivative meltdown", with more to come.
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. Plus a free trial to Kevin's daily trading service.
