Kevin Haggerty is a full-time professional trader who was
head of trading for Fidelity Capital Markets for seven years. Would you like
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The SPX closed at
1274.08, +0.3%, with the .50 RT to 1326.70 from the 1219.29 low at
1273 and the .618 RT at 1286. The Dow went out at 11,225, +0.7%, primarily
because of the +6.04% gain by Altria (MO | news | PowerRating | PR Charts ). The RT levels in play to the
11,670 bull cycle high from 10,699 are 11,185 and 11,300. The market action
yesterday was on the light side, with NYSE volume of 1.4 billion shares and the
daily range for the SPX only 7.7 points between 1278.32 - 1270.58. Volume
ratio was 59 and breadth +811. The XAU led the upside at +1.1% and has finished
plus for five consecutive days. The pullback to the 575 - 550 support zone for
$GOLD (continuous contract, EOD) brought in buyers. The $US is being sold and
gold bought by the Saudis, Russians and Chinese as they continue to adjust their
reserves because of the $US weakness against other currencies. The $US will
accelerate to the downside on any Fed pause and the continuation of other
countries to raise their rates, as they are currently doing. Crude oil made new
highs and the energy sector continues to be a leader. Technology is sick, and as
one can observe by checking the daily charts for the QQQQ, SMH and $COMPX, the
Generals continue to buy defensive issues like healthcare, medical and food
stocks, to name a few. All you have to do is check the charts of the sector
SPDRs and you will see that the XLP (consumer staples SPDR) is the strongest
one, making a new bull cycle high yesterday and also the highest high since
5/02. No one should have to paint you a picture about what the Generals' current
perception of this market is, as the bear market defensive stocks lead, along
with the commodity sector stocks.
Rallies in the major indices will bring out more
selling. Those of you holding Select energy and gold funds--in addition to
cash--are in good position relative to the current risk of this market.
Have a good trading day,
Kevin Haggerty
