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 major indexes all made new rally highs last week, and the SPX was +2.1 on the week to finish at 1217.28. The Consumer discretionary +2.7, Energy +2.6, Utilities +1.6, and Industrials +1.4 provided the leadership, while Health Care -1.5, and Financials -1.1, led the downside. Only 3 sectors have outperformed the SPX YTD, and they are Consumer Discretionary +19.8, Industrials +19.0, and Financials +16.7, while the SPX is +9.2 followed by Energy at +7.7.
The SPX is +82.5% low to high as of Friday, is obviously extremely O/B, and in fact, is more O/B right now than it was at the 2007 highs as measured by the Bullish Percent Indexes. The GS -1.6% decline on 4/16 is a one off based on how the market advanced to new highs last week. Greece is headed for a sovereign debt collapse, and any bailout plan will only delay it but won't stop it. This will spread to some of those other countries outlined in the previous commentary, and this could benefit the USD, Gold, and U.S. Equity markets on a short term basis.
The SPX was anticipated to reach the 1229 .618RT zone on this rally off the 1044.50 low in the key price and time zone, and it hit a 1219.54 intraday high this morning, so it is essentially in that zone. At 1229 the SPX will be +84.3% for this bull cycle, which started from the 667 3/9/09 low, and this is in a hostile anti business, and spend and tax environment in Washington, so if you are fully invested in equities it would be prudent to adjust your equity allocations accordingly [reduce]. However, if the Republicans win either the House or Senate in November, this market will trade higher.
In addition to the 1229 .618RT there is also price symmetry at 1230-1233, which is the big H&S PX objective, and then the current range B/O price objective at 1244. The complete symmetry outline is included in the Trading Service market Commentary section for today which you can access with a free one week trial subscription.
Have a good trading day!
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