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 my previous commentary I said it was obviously positive that the SPX took out the 1121 .50RT to 1576 from 667 again, and that it would most likely take out the 1/19 1150.45 cycle high being that the iShares Russell 2000 Index Fund (IWM), SPDR Mid Cap 400 (MDY), COMPX, and DXY had already made new cycle highs, in addition to the Industrial Select Sector SPDR Fund (XLI), Consumer Discretionary Select Sector SPDR Fund (XLY), Consumer Staples Select Sector SPDR Fund (XLP), HOLDRS Retail (RTH), and the TRAN.

The market was ST-O/B coming into the week, in addition to the SPX being up 6 straight days, and now it is even more ST-O/B with the SPX up 9 of the last 10 days, QQQ up 10 straight days, and the IWM + 9 days. The SPX hit a 1150.24 intraday high and close yesterday, and the SPX futures are +5.0 points as of 9:20AM, so the SPX will make a new cycle high this morning.

The SPX is only -6.9% from the 1229 level, which is the .618RT to 1576 from 667, so the odds are obviously strong now that it will reach that zone after the 1150.45 cycle high is taken out. However, because of the extended ST-O/B condition and current time symmetry there will be another pullback before the 1229 zone is reached. The market needs the pullback to alleviate the O/B condition in order to sustain an advance to the 1229 zone.

Have a good trading day!

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