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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.
In the commentary for 6/12 I said that the 923-950 SPX key price zone range would be resolved to the down side that week, but with one day left it wasn't looking so good. However, I was only a couple of days off as it got resolved on a closing basis on Tuesday with a 911.70 close. During the 10 day range all of the closes were within that range, with the highest being 946.21 last Friday, and there was an intraday rally high at 956.29 last Thursday, with 6/10 -6/11 being key time dates, which had been anticipated by trading service members.
Contracted volatility usually precedes sharp moves, and with the SPX in a relatively narrow range right at the 200DEMA for 10 days, it could have been resolved in either direction. However, the odds favored a decline after the +43.3% advance in just 67 days to the 956.29 high. Also, the average weekly NYSE volume had declined during the range period from 1.48 bill shs to 1.37, and then 1.04 bill shs last week with the 956.29 rally high. Markets can easily move to the downside on light volume, but it takes cash to move them up.
The SPX made a 903.78 intraday low yesterday versus the 200D SMA at 906, which is the one the empty suits on CNBC focus on, as well as most retail services, while the 200D EMA is 942.77, and is obviously the one that is key to any continuation move above that 923-950 range. Friday is a "triple witch" expiration (I don't acknowledge 4) and the SPX is down 3 straight days and -3.8%, so the odds favor a Friday close above yesterday's 903.78 intraday low. The market is in a ST-O/S condition with the 4MA's of the volume ratio and breadth at 31, and -1042
The initial downside levels below 900 to be aware of on continued weakness are the 50DEMA at 895, the .236RT to 667 from 956 at 888, minor support at 878, and then the 846 .382RT to 667. There are some key angles also, but those are outlined in the trading service. If the Generals mark up their portfolios into the end June, and they will if they can (news permitting), it will just be another good shorting opportunity for short term traders.
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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